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LIBRARY 

UNIVERSITY  OP 
CALIFORNIA 
SAN  fXESO  i 


UHIVERSITY  OF  CALIFORNIA,  SAN  DIEGt/ 
LA  JOLU,  CALIFORNIA 

THE   MONEY 
OF   THE    CONSTITUTION. 


BY 

ALLEN  RIPLEY  FOOTE. 
Editor  of  "THE  AMERICAN  EXPORTER." 

AUTHOR    OF 

ECONOMIC  VALUK  i)F  ELECTRIC  LIGHT  AND  POWER,"  "PROSPERITY 

AND    POLITICS,"     "A    DISCUSSION    OF    ECONOMIC    PRINCIPLES 

INVOLVED  IN   THE   LAW   OF   INCORPORATED   COMPANIES 

OPERATING    UNDER   MUNICIPAL   FRANCHISES," 

A     SOUND     CURRENCY     AND     BANKING    SYSTEM — HOW     IT     MAY     BE 

SECURED." 


Published  by  the  Author, 

Bennett  Building, 

New  York. 


Copyright, 
ALLEN  RIPLEY  FOOTE, 


John  Polhemus  Printing  Co.,  121  Fulton  Street,  New  York. 


(  I  ^*r 


THE   MONEY    OF   THE   CONSTITUTION. 


CONTENTS. 


1.  Citations  from  the  Constitution 

2.  The  WORD  "  Money  "  IN  THE  Constitution 

3.  Power  to  Coin   Money   and    Regulate   the   Value 

Thereof  ....... 

4.  Principles  of  Sound  Money 

5.  The  Constitution    was   Adopted   with,  a   Distinct 

Understanding  as  to  the  Principles  that  Should 
Govern  the  Powers  of  Coinage  Delegated  to 
Congress  ...... 

6.  What  Those  who  Framed  and  Adopted  the  Consti- 

tution   Understood    its    Provisions   to    Mean  in 
Regard   to  Money,    Stated    in  Their   Own   Lan 
guage       ...... 

I.     Money  of  Account   . 
II.     Nature  of  the  Money  Unit 
III.     Denominations  of  Coins 
IV.     Alloy,  Character  and  Weight     , 
V.     Charges  for  Coinage 
VI.     Standards  of  Value 
VII.     Ratio    of    Value    Between    Gold    and 
Silver  .... 

VIII.     Weight  of  Coins 
IX.     Debasement  of  Coins 
X.     Legal  Tender  Power 

7.  The  People  Have  Not  Been  Correctly  Taught 

8.  For  the  Honest  Minded  Who  are  Not  Correctly 

Informed  ..... 

No.  I.     Unchangeable  Unit  oi 


PAGE. 
I 


I. 


II. 


Fallacy 
Value 

Fallacy 
Value 


No.  2.  Double  Standard  of 


10 
12 

14 
18 
21 

25 

32 

38 
52 
58 
63 


69 


71 


73 


IV  CONTENTS. 

PAGE. 

III.  Fallacy   No.    3.      That    the    Value    of 

Coins  is  Regulated  by  Law,  Regard- 
less OF  the  Commercial  Value  of  the 
Metal  they  Contain        .  .  -79 

IV.  Fallacy  No.  4.      That  the  Manufacture 

of  a  Coin  Once  Authorized  Cannot  be 
Discontinued.         .  .  .  .81 

V.  Fallacy  No.  5.  That  a  Coin,  the  Com- 
mercial Value  of  the  Bullion  Con- 
tents of  Which  is  Not  Equal  to  its 
Denominational  Value,  Can  be  "The 
Money  of  the  Constitution  "    .  .84 

VI.  The  Principles  of  Sound  Money  as  De- 
fined and  Applied  by  the  Founders  of 
the  Republic  .  .  .  .89 

9.     For  the  Dishonest  .  .  .  .  .90 

10.     Conclusions  ......  100 


THE  MONEY  OF   THE  CONSTITUTION. 

The  popular  phrase  "  The  Money  of  the  Con- 
stitution," strictly  construed,  means  the  money 
authorized  by  those  who  framed  and  adopted  the 
Constitution  in  the  first  coinage  law,  enacted 
April  2,  1792,  and  approved  by  President  George 
Washington. 

The  Constitution  itself  does  not  designate  any 
particular  kind  of  money,  but  delegates  to  Con- 
gress the  exclusive  right  "  to  coin  money  ; ''  there- 
fore, anything  that  Congress  may  authorize  to  be 
issued  from  the  United  States  mint  as  coined 
money  is  Constitutional  Money. 

For  the  sake  of  popular  recognition,  it  will  be 
assumed  that  those  who  use  the  phrase  "  The 
Money  of  the  Constitution  "  most  frequently  and 
with  greatest  unction,  mean  the  mone}'  author- 
ized by  the  first  coinage  act  of  1792.  Clearly 
to  show  the  principles  involved  in  that  act,  and  the 
opinions  regarding  them  held  by  those  charged 
with  the  consideration  of  the  subject  during  the 


VI 

period  in  which  the  Constitution  was  formulated 
and  adopted  down  to  and  including  the  enact- 
ment of  the  coinage  law  of  1792,  and  solely  to  in- 
form the  people  what  the  Money  of  the  Constitu- 
tion really  was,  is  the  object  of  the  following  ex- 
amination of  the  official  records  of  that  time. 
That  this  may  be  done  intelligently  and  concisely, 
all  provisions  in  the  Constitution  pertaining  to 
the  subject  will  first  be  cited  ;  then  all  essential 
passages  in  official  documents  will  be  quoted,  ar- 
ranged to  elucidate  the  principle  to  which  they 
pertain,  followed  by  the  paragraph  in  the  Coinage 
Law  of  1792,  in  which  the  principle  is  applied. 

This  method  will  enable  the  reader  to  see  ex- 
actly what  views  were  held  on  any  point  by  those 
who  founded  the  government,  and  how  they 
finally  gave  practical  effect  to  their  opinions  in 
the  coinage  law  enacted  by  their  co-operation  and 
approval. 

Following  the  examination  of  official  docu- 
ments is  a  discussion  of  the  principles  involved, 
designed  to  expose  the  fallacies  taught  by  those 
now  demanding  the  free  coinage  of  silver  at  the 
raiio  of  16  to  i,  who  ignorantly  or  maliciously 
represent  that  they  are  seeking  to  establish  a  bi- 
metalic  coin  circulation,  or  are  asking  for  the 
restoration  of  "the  Money  of  the  Constitution," 


I.     CITATIONS  FROM  THE  CON- 
STITUTION. 

ARTICLES  OF  CONFEDERATION  OF  JULY  9,  1 778. 

Article  9.  *  *  *  The  United  States  in  Con- 
gress assembled  shall  also  have  the  sole  and  ex- 
clusive right  and  power  of  regulating  the  alloy 
and  value  of  cqin  struck  by  their  own  authority, 
or  by  that  of  the  respective  states — fixing  the 
standard  of  weights  and  measures  throughout  the 
United  States. 

constitution  of  the  united  states. 

(Went  into  operation  on  the  first  Wednesday  of 
March,  1789.) 

preamble. 

We,  the  people  of  the  United  States,  in  order  to 
form  a  more  perfect  union,  establish  justice,  en- 
sure domestic  tranquillity,  promote  the  general 
welfare,  and  secure  the  blessings  of  liberty  to  our- 
selves and  our  posterity,  do  ordain  and  establish 
this  Constitution  for  the  United  States  of  Am- 
erica. 

article  I. 

Section  8.  The  Congress  shall  have  power: 
3.  To  regulate  commeixe  with  foreign  nations, 

and  among-  the  several  states,  and  with  the  Indian 

tribes. 


5-  To  coin  moiie}-,  regulate  the  value  thereof, 
and  of  foreign  coin  ;  and  fix  the  standard  of  weights 
and  measures. 

6.  To  provide  for  the  punishment  of  counter- 
feiting the  securities  and  current  coin  of  the 
United  States. 

1 8.  To  make  all  laws  which  shall  be  necessary 
and  proper  for  carrying  into  execution  the  fore- 
going powers ;  and  all  other  powers  vested  by 
this  Constitution  in  the  government  of  the  United 
States,  or  in  any  department  or  officer  thereof. 

Section  io.  i.  No  state  shall  '^  ^  '■•  coin 
money  ;  emit  bills  of  credit ;  make  anything  but 
gold  and  silv^er  coin  a  tender  in  payment  of  debts  ; 
pass  any  law  impairing  the  obligation  of  contracts. 

ARTICLE   VI. 

2.  This  Constitution  and  the  laws  of  the  United 
States,  which  shall  be  made  in  pursuance  thereof, 
and  all  treaties  made,  or  which  shall  be  made, 
under  the  authority  of  the  United  States,  shall  be 
the  supreme  law  of  the  land  ;  and  the  judges  in 
every  state  shall  be  bound  thereby,  anything  in 
the  Constitution  or  the  laws  of  any  state  to  the 
contrar}'  notwithstanding. 

ARTICLE   IX. 

The  enumeration,  in  the  Constitution,  of  certain 
rights  shall  not  be  construed  to  deny  or  disparage 
others  retained  by  the  people. 


ARTICLK    X, 

The  powers  not  deleg-ated  to  the  United  States 
by  the  Constitution,  nor  prohibited  b}'  it  to  the 
States,  are  reserved  to  the  States,  respectively,  or 
to  the  people, 

2.     THE  WORD  "MONEY"  IN  THE 
CONSTITUTION. 

The  word  "  money  "  is  used  in  the  Constitution 
in  the  sense  custom  had  assigned  to  it.  It  means 
coins  of  gold,  silver  or  copper.  //  does  not  mean 
paper  eurrency. 

The  Journal  of  the  Continental  Congress  for 
Thursday,  June  22,  1775,  calls  the  paper  currency 
authorized  to  be  issued  "  bills  of  credit,"  and  they 
are  so  called  in  the  report  of  the  Committee  on 
Relative  Value  of  Current  Specie,  1776. 

In  the  coinage  scheme  proposed  by  Robert 
Morris,  January  15,  1782,  he  refers  to  currency 
notes  as  a  "paper  circulation,"  but  not  as  money. 
Jefferson,  in  his  discussion  of  "  A  Money  Unit," 
makes  no  reference  to  paper  currency. 

Hamilton,  in  his  report  "  on  the  establishment 
of  a  Mint,"  refers  to  paper  currency  as  "  bank 
circulation,"  and  in  the  Constitution,  Section  10, 
paragraph  i,  paper  currency  is  referred  to  in  the 
language  used  in  the  official  acts  of  the  Continental 
Congress,  as  "  bills  of  credit." 

"  The  Money  of  the  Constitution  "  was  there- 
fore gold  and  silver  coin.  All  that  is  required  to 
provide   the   people   of   the  United    States   with 


sound  money,  money  that  will  be  sound  in  any 
market  in  the  world,  is  to  insist  upon  the  honest 
and  intelligent  execution  of  the  provisions  of  the 
Coinage  act  of  1792.  In  the  light  of  this  fact  the 
agitation  for  "  sound  money  "  that  has  been  carried 
on  during  the  past  few  years  is  a  remarkable  and 
a  most  humiliating  exhibit  of  the  lack  of  correct 
monetary  education  among  the  people. 


3.  THE  POWER  TO  COIN  MONEY  AND 
REGULATE  THE  VALUE  THEREOF. 

The  power  to  coin  money  and  regulate  the 
value  thereof  can  have  no  other  meaning  than  that 
understood  by  those  who  wrote  and  adopted  the 
Constitution.  The  power  to  regulate  the  value  of 
Coined  Money,  delegated  to  Congress  by  the 
States,  first  appeared  in  the  Articles  of  Confedera- 
tion as  the  "  sole  and  exclusive  right  and  power  of 
regulating  the  alloy  and  value  of  coin  struck  by 
their  OAvn  authorit3^  or  by  that  of  the  respective 
states."  That  this  power  was  delegated  to  be 
exercised  as  it  was  then  understood  it  would  be 
exercised,  cannot  be  questioned.  How  it  would 
be  exercised  was  made  sufficientl}'  clear  by  the 
coinage  scheme  proposed  by  Robert  Morris  in 
1782;  fully  discussed  by  Thomas  Jefferson  in  his 
"  notes  on  the  establishment  of  a  money  unit 
and  of  a  coinage  for  the  United  States,"  in  1783  ; 
by  the  "  report  of  a  grand  committee  on  the  Money 
Unit,"  1785  ;  by  "Tetters  from  the  board  of  Treas- 


5 

ury,"  1786,  and  the  "Mint  Ordinance"  of  that 
year.  The  subject  was  publicly  discussed  almost 
continuously  from  1782  to  the  date  of  adopting  the 
Constitution  in  1789;  a  sufficient  time  to  prevent 
any  misunderstanding-  as  to  the  means  that  would 
be  used  to  "  regulate  the  value  of  Coined  Money." 
That  there  was  no  misconception  on  this  subject 
is  established  beyond  the  possibility  of  a  doubt 
by  the  "  report  of  Alexander  Hamilton  on  the 
establishment  of  a  Mint"  in  1791  ;  the  approval  of 
his  report  by  Thomas  Jefferson  in  1792;  and  the 
enactment  of  a  law  establishing  a  mint  and  regulat- 
ing the  value  of  coined  money,  April  2,  1792.  This 
report,  and  the  letter  and  enactment  following,  are 
in  harmony  with  the  discussions  that  preceded  the 
adoption  of  the  Constitution,  and  must  be  accepted 
as  an  authoritative  construction  of  the  power 
vested  in  Congress  by  the  Constitution  by  those 
who  adopted  it.  The  law  of  April  2,  1792,  was 
enacted  under  authority  of  Article  I,  Section  8, 
Paragraph  18,  of  the  Constitution  and  was  the 
first  enactment  designed  to  carry  into  effect  the 
power  "to  coin  money  and  regulate  the  value 
thereof."  Its  constitutionality  has  never  been 
questioned.  The  coined  money  authorized  by  it 
is  unquestionably  the  only  kind  of  coined  money 
intended  to  be  authorized  when  the  slates  dele- 
gated the  exclusive  power  to  the  Congress  "  to 
coin  money  and  regulate  the  value  thereof." 

The  reasons  for  delegating  this  power  to  the 
Congress  are  not  difificult  to  understand.  It  was 
necessar}^  to  do  so  to  secure  a  uniform  system  of 


Money  Arithmetic,  Money  of  Account,  and  Coined 
Money,  and  to  protect  the  same  from  counterfeit- 
ing and  debasement ;  to  make  definite  the  terms  of 
contracts  and  bargains  ;  to  provide  a  legal  tender ; 
to  facilitate  and  regulate  Commerce  between  the 
States;  to  "establish  justice"  between  creditor 
and  debtor,  and  to  "  promote  the  general  welfare." 
While  Congress  was  free  to  accept  or  reject  all 
suggestions  mdido:  previous  to  the  enactment  of  the 
law  of  April  2,  1792,  establishing  a  Mint  and  regu- 
lating the  value  of  its  Coinage,  after  its  enactment 
it  was  bound  by  the  provisions  of  the  law  in  its 
relation  to  the  Constitution  until  it  was  changed 
by  a  subsequent  enactment.  In  this  respect  the 
position  is  the  same  as  that  of  two  persons  engaged 
in  formulating  a  contract.  Before  the  contract  is 
signed  it  is  in  order  to  suggest  any  changes 
thought  desirable  by  either  party.  After  it  is 
signed  both  parties  must  abide  by  its  terms. 


4.     PRINCIPLES  OF  SOUND  MONEY. 

The  principles  to  govern  the  coinage  of  the 
United  States,  advocated  and  recommended  by 
those  in  authority,  before  and  after  the  adoption  of 
the  Constitution,  which  are  incoi"porated  in  the  first 
law  establishing  a  mint  and  regulating  the  value 
of  its  coinage,  may  be  briefly  stated  as  follows : 

I.  That  denominations  of  the  coins  should  be 
regulated  in  conformity  with  the  decimal  system 
of  accounting,  with  one  dollar  as  its  unit. 


2.  That  the  denomination  of  the  coins  should 
be  based  on  the  dollar  then  in  use  and  with  which 
the  people  were  familiar. 

3.  That  one  dollar  should  be  the  unit  of  value 
whether  of  gold  or  silver. 

4.  That  the  commercial  value  of  the  contents  of 
the  coins  should  be  equal  to  the  value  expressed 
by  the  denomination  of  the  coins. 

5.  That  the  ratio  between  the  bullion  weight  of 
the  contents  ot  gold  and  silver  coins  should  be  the 
same  as  the  ratio  between  the  commercial  value 
of  gold  and  silver  bullion. 

6.  That  the  margin  of  difference  between  un- 
coined and  coined  bullion  should  be  a  percentage 
only  sufificient  to  cover  the  cost  of  fabrication 
without  yielding  a  profit. 

The  idea  of  making  a  profit  by  coining  money 
containing  bullion  less  in  value  than  the  value  ex- 
pressed by  the  denomination  of  the  coin,  except  in 
the  case  of  token  money,  was  rejected  as  being 
incompatible  with  the  idea  of  integrity  and  the 
declared  purpose  of  the  Constitution  to  "  establish 
justice  "  and  "  promote  the  general  welfare." 

Money  coined  in  conformity  with  these  princi- 
ples can  never  be  anything  else  than  sound  money. 
It  always  has  been  and  always  will  be  accepted  as 
sound  money  in  every  market  in  the  world.  These 
principles  are  as  applicable  to  a  silver  as  to  a  gold 
standard  of  values,  and  coins  struck  in  conformity 
with  them  are  as  sound  money  in  one  metal  as  in 
the  other. 


8 

5.  THE  CONSTITUTION  WAS  ADOPTED 
WITH  A  DISTINCT  UNDERSTAND- 
ING AS  TO  THE  PRINCIPLES  THAT 
SHOULD  GOVERN  THE  POWERS 
OF  COINAGE  DELEGATED  TO 
CONGRESS. 

In  the  section  restricting  the  poivcrs  of  the  states, 
the  Constitution  says :  "  No  state  shall  coin  money, 
emit  bills  of  credit  (currency  notes)  or  make  any- 
thing but  gold  or  silver  a  tender  in  payment  of 
debts."  The  power  granted  to  Congress  "to  coin 
money "  is  without  limitation  of  any  kind ;  the 
restriction  placed  on  State  governments  is  definite 
and  absolute.  Its  admits  of  no  misunderstanding 
or  evasion.  The  logical  conclusion  is  that  Con- 
gress is  bound  to  provide  the  kind  of  coins  the 
Constitution  permits  state  governments  to  make 
legal  tender,  but  it  does  not  go  to  the  extent  of 
limiting  the  power  of  Congress  to  the  use  of  gold 
and  silver  only,  nor  to  requiring  Congress  to 
supply  gold  or  silver  coins  of  any  particular  de- 
nominations or  in  equal  or  any  specified  amounts. 
Congress  may  fairly  be  called  upon  to  supply  all 
the  gold  or  silver  coin  demanded  because,  the 
states  having  deprived  themselves  of  the  power  to 
coin  money,  and  having  made  it  mandatory  upon 
themselves  to  use  nothing  but  gold  and  silver  coin 
as  a  tender  for  the  payment  of  debts,  the  compact 
necessarily  implied  that  Congress  would  supply 
all  the  gold  and  silver  coins  required  for  such  pur- 
pose.     The   implication    went    beyond    this   and 


assumed  that  the  coins  would  be  supplied  in  de- 
nominations required  by  the  system  of  Money 
Arithmetic,  substantially  as  recommended  by  Rob- 
ert Morris,  Thomas  Jefferson,  and  others  whose 
proposals  for  establishing  a  coinage  for  the  United 
States  were  before  the  people  for  discussion,  sev- 
eral years  previous  to  the  adoption  of  the  Consti- 
tution. 

The  implication  went  one  step  farther  and 
assumed  that  the  principles  to  govern  the  coinage 
would  be  those  advocated  by  Robert  Morris, 
Thomas  Jefferson  and  other  statesmen  who  had 
made  a  close  study  of  the  subject  and  reported 
their  recommendations  lor  the  information  and 
guidance  of  the  people. 

That  it  was  intended  Congress  should  have 
power  to  coin  money  from  other  metal  than  gold 
and  silver,  and  to  add,  or  discontinue,  the  coinage 
of  any  particular  piece,  of  any  denomination  or 
metal,  and  should  exercise  such  power  at  its  dis- 
cretion, is  shown  by  the  official  report  of  the 
Superintendent  of  Finance  before,  and  the  Secre- 
tary of  the  Treasury  after,  the  adoption  of  the 
Constitution. 

Another  implication,  more  vital  than  those  men- 
tioned, is  found  in  the  entire  absence  of  any  refer- 
ence in  the  Constitution  to  the  system  of  Money 
Arithmetic  in  which  the  money  of  Account  should 
be  expressed.  This  system  was  adopted  by  reso- 
lution of  the  Continental  Congress  before  and  was 
enacted  in  the  First  Coinage  law  after  the  adop- 
tion of  the  Constitution. 


lO 

While  the  exclusive  right  to  Coin  Mone}^  was 
delegated  to  Congress,  the  right  to  authorize 
the  issue  of  paper  currency  was  as  plainly  re- 
served to  the  States.  The  States  were  exercising 
this  right  when  the  Constitution  was  adopted  and 
continued  the  unquestioned  exercise  of  it  until 
Congress  placed  a  ten  per  cent  tax  upon  such  cur- 
rency, as  a  war  measure,  act  of  July  13,  1866. 

Upon  these  implications  an  understanding  was 
founded  which  justified  the  granting  of  unlimited 
power  on  the  one  hand  and  the  submission  to  a 
definite  and  narrow  restriction  on  the  other  hand. 
This  understanding  made  these  principles  a  part 
ol  the  Constitution  as  completely  as  though  they 
were  written  into  it.  The  men  who  drafted  and 
adopted  the  Constitution,  among  whom  were 
Robert  Morris,  Thomas  Jefferson  and  Alexander 
Hamilton,  were  men  of  high  honor  who  needed  no 
inflexible  provisions  to  compel  them  to  carry  into 
effect  the  principles  they  advocated. 


6.  WHAT  THOSE  WHO  FRAMED  AND 
ADOPTED  THE  CONSTITUTION 
UNDERSTOOD  ITS  PROVISIONS  TO 
MEAN  IN  REGARD  TO  MONEY, 
STATED  IN  THEIR  OWN  LAN- 
GUAGE. 

The  claim  that  the  "  Money  of  the  Constitution  " 
can  constitutionally  be  different,  in  any  essential 
particular,  from  what  those  intended  who  framed 


1 1 


and  adopted  that  great  charter  from  the  people, 
to  the  people,  for  the  people,  does  injustice  to 
their  intelligence.  Clearly  to  show  what  they 
understood  its  monetary  provisions  to  be,  an 
examination  of  their  discussions,  recommenda- 
tions, and  procedures,  preceding  and  immediately 
following  the  adoption  of  the  Constitution  is 
necessary.  That  this  examination  may  plainly 
show  the  principles  of  sound  money  advocated 
and  approved  by  the  founders  of  the  Republic, 
the  subject  is  classified  under  the  following  head 
ings: 

I. —  Money  of  Account. 
II. — Nature  of  the  Money  Unit. 
III. — Denominations  of  Coins. 
IV. — Alloy,  Character  and  Weight. 
V. — Charges  tor  Coinage. 
VI. — Standard  of  Value. 
VII.— Ratio  of  Value  between  Gold  and  Silver. 
VIII. — Weight  of  Coins. 
IX. —Debasement  of  Coins. 
X. — Legal  Tender  Power. 

Every  quotation  is  taken  from  official  docu- 
ments and  is  designed  to  let  those  who  framed 
and  adopted  the  Constitution,  and  enacted  a  law 
under  which  a  Mint  and  Coinage  for  the  United 
States  was  established,  explain  in  their  own  words 
what  they  intended  and  understood  "  the  Money 
of  the  Constitution  "  to  be. 


12 

1.— MONEY  OF  ACCOUNT 

January  15,  1782. 

Although  it  is  not  absolutely  necessary,  yet  it  is 
very  desirable  that  money  should  be  increased  in 
a  decimal  ratio,  because  by  that  means  all  calcula 
tions  of  Interest,  Exchange,  Insurance  and  the 
like  are  rendered  much  more  simple  and  accurate, 
and  of  course  more  within  the  power  of  the  great 
mass  of  people. 

Robert  Morris, 
Superintcndoit  of  Finance. 


,  1783. 

Certainly  in  all  cases  where  we  are  free  to  chuse 
between  easy  and  difficult  modes  of  operation,  it 
is  most  rational  to  chuse  the  easy.  The  financier 
therefoi-e,  in  his  report  well  proposes  that  our 
coins  should  be  in  decimal  proportions  to  one 
another. 

Thomas  Jefferson. 


May  13,  1785. 

The  Money  Arithmetic,  though  an  important 
question,  is  one  that  can  admit  of  little  dispute. 
All  accountants  must  prefer  decimals. — Report  of 
Grand  Committee  on  Money  Unit. 


13 

Tuesday,  August  8,  1783. 

Resolved :  That  the  money  of  account,  to  corres- 
pond with  the  division  of  coins,  proceed  in  decimal 
ratio  agreeabl}'  to  the  forms  and  manner  follow- 
ing, viz.:  Mills,  Cents,  Dismes,  Dollars,  or  Money 
Unit. — Resolution  of  Coinage,  Continental  Congress. 


Friday,  April  28,  1791. 
It  is  certain  that  nothing  can  be  more  simple  or 
convenient  than  the  decimal  subdivisions.  There 
is  every  reason  to  expect  that  the  method  will 
speedily  grow  in  general  use,  when  it  shall  be 
seconded  by  corresponding  coins.  On  this  plan, 
the  unit  in  the  money  of  account  will  continue  to 
be,  as  established  by  resolution  of  August  8,  1786, 
a  Dollar ;  and  its  multiples,  dismes,  cents,  and 
mills,  or  tenths,  hundredths,  and  thousandths. 
Alexander  Hamilton, 

Secretary  of  the  Treasury. 


coinage  law  of  april  2,  1 792, 

Section  20.  And  be  it  further  enacted, 
that  the  money  account  of  the  united 
States  shall  be  expressed  in  dollars  or 
units,  dismes  or  tenths,  cents  or  hundredths, 
and  mills  or  thousandths,  a  disme  being  a 
tenth  part  of  a  dollar,  a  cent  the  hun- 
dredth part  of  a  dollar,  a   mill  the  thou" 


14 


SANDTH  PART  OF  A  DOLLAR,  AND  THAT  ALl 
ACCOUNTS  IN  PUBLIC  OFFICES  AND  ALL  PROCEED- 
INGS IN  THE    Courts   of   the    United   States 

SHALL  BE  KEPT  AND  HAD  IN  CONFORMITY  TO  THIS 
REGULATION. 


II.— NATURE  OF  THE  MONEY  UNIT. 

January  15,  1782. 

To  have  the  money  unit  very  small  is  advanta- 
geous to  commerce  ;  but  there  is  no  necessity  that 
this  money  unit  be  exactly  represented  in  coin  ; 
it  is  sufficient  that  its  value  be  precisely  known. 

Robert  Morris, 
Superintendent  of  Finance. 


-- --,  1783. 

The  expediency  attending  the  size  of  the  money 
unit  will  be  evident  to  any  one  who  will  consider 
how  inconvenient  it  would  be  to  a  manufacturer 
or  merchant,  if  instead  of  the  yard  for  measuring 
cloth,  either  the  inch  or  the  mill  had  been  made 
the  unit  or  measure. 

The  unit,  its  multiples  and  subdivisions  should 
coincide  in  value  with  some  of  the  known  coin  so 
nearly,  that  the  people  may,  by  a  quick  reference 
in  the  mind,  estimate  their  value.  If  this  be  not 
attended  to,  the}'  will  be  very  long  in  adopting 
the  innovation,  if  they  ever  adopt  it. 


15 

The  unit  or  dollar  is  a  known  coin  and  the  most 
familiar  of  all  to  the  mind  of  the  people.  It  is 
already  adopted  from  South  to  North,  has  identi- 
fied our  currency  and  therefore  happily  offers 
itself  as  a  unit  already  introduced,  our  public 
debt,  our  requisitions  and  their  apportionments 
have  given  it  actual  and  long  possession  of  the 
place  of  unit. 

Thomas  Jefferson. 


Wednesday,  July  6,  1785. 

On  the  question  that  the  money  unit  of  the 
United  States  of  America  be  one  dollar,  the  yeas 
and  nays  being  required  by  Mr.  Howell,  every 
member  answering  ay,  it  was 

Resolved,  That  the  mone}'  unit  of  the  United 
States  be  one  dollar. — Resolution  of  Coinage,  Conti- 
nental Cons^ress. 


April  28,  179L 

The  next  inquiry  towards  a  right  determination 
of  what  ought  to  be  the  future  money  unit  of  the 
United  States,  turns  upon  the  questions  ;  whether 
it  ought  to  be  peculiarly  attached  to  either  of  the 
metals,  in  preference  to  the  other  or  not?  And, 
if  to  either,  to  which  of  them  ? 

The  suggestions  and  proceedings  hitherto  have 
had  for  their  object  the  annexing  of  it  emphati- 


i6 

cally  to  the  silver  dollar.  A  resolution  of  Con- 
gress of  the  6th  of  July,  1785,  declares  that  the 
money  unit  of  the  United  States  shall  be  a  dollar  ; 
and  another  resolution  of  the  8th  of  August,  1786, 
fixes  that  dollar  at  375  grains  and  64  hundredths 
of  a  grain  of  fine  silver.  The  same  resolution, 
however,  determines  that  there  shall  also  be  two 
gold  coins  ;  one  of  246  grains  and  268  parts  of  a 
grain  of  pure  gold,  equal  to  ten  dollars  ;  and  the 
other,  of  half  that  quantity  of  pure  gold  equal  to 
five  dollars.  And  it  is  not  explained  whether 
either  of  the  two  species  of  coins  of  gold  or  of 
silver  shall  have  any  greater  legality  in  payments 
than  the  other.  Yet  it  would  seem  that  a  pref- 
erence in  this  particular  is  necessary  to  execute 
the  idea  of  attaching  the  unit  exclusively  to  one 
kind.  If  each  of  them  be  as  valid  as  the  others, 
in  payments  to  any  amount,  it  is  not  obvious  in 
what  effectual  sense  either  of  them  can  be  deemed 
the  money  unit,  rather  than  the  other. 

If  the  general  declaration,  that  the  dollar  shall 
be  the  money  unit  of  the  United  States,  could  be 
understood  to  give  it  a  superior  legality  in  pay- 
ments, the  institution  of  coins  of  gold,  and  the 
declaration  that  each  of  them  shall  be  equal  to  a 
certain  number  of  dollars,  would  appear  to  destroy 
that  inference.  And  the  circumstance  of  making 
the  dollar  the  unit  in  the  money  of  account,  seems 
to  be  rather  matter  of  form  than  of  substance. 
The  Secretary  is,  upon  the  whole,  strongly  in- 
clined to  the  opinion  that  a  preference  ought  to 
be  given  to  neither  of  the  metals  for  the  money 


17 

unit.     Per  Imps,    if  either  were   to   be  preferred,    it 
ouiriit  to  be  gold  rather  than  silver. 

It  seems  to  be  most  advisable  not  to  attach  the 
unit  exclusively  to  either  of  the  metals  ;  because 
this  cannot  be  done  effectually,  without  destroying 
the  office  and  character  of  one  of  them  as  money, 
and  reducing  it  to  the  situation  of  a  mere  mer- 
chandise, which  would  probably  be  a  greater  evil 
than  the  occasional  variations  in  the  unit,  from  the 
fluctuations  in  the  relative  value  of  the  metals  ; 
especially  if  care  be  taken  to  regulate  the  proportions 
betiveen  them,  zvith  an  eye  to  their  average  covuiiercial 
value. 

The  chief  inducement  to  the  establishment  of 
the  small  (dollar)  gold  piece,  is  to  have  a  sensible 
object  in  that  metal,  as  well  as  in  silver,  to  express 
the  unit, 

Alexander  Hamilton, 

Secretary  of  the   Treasunj. 


February,  1792. 

/  concur  in   thinkifig  that  the  unit  must  stand  on 
both  metals. 

Thomas  Jefferson. 


colnage  law  of  april  2,  1 792. 

Section  9.    And    be    it    further    enacted, 
that   there   shall    be    from    time    to    time 


i8 


STRUCK  AND  COINED  AT  THE  SAID  MINT,  COINS 
OF  GOLD,  SILVER  AND  COPPER  DENOMINATIONS, 
VALUES   AND   DESCRIPTIONS,     VIZ:      EaGLES    EACH 

to  be  of  the  value  of  ten  dollars  or  units. 
*  *  *  Dollars  or  units.  *  *  *  Cents  each 
to  be  of  the  value  of  one  hundredth  part 
of  a  dollar. 


III.— DENOMINATIONS  OF  COINS. 

,  1783. 

If  we  adopt  the  dollar  as  our  unit,  we  should 
strike  four  coins,  one  of  gold,  two  of  silver,  and 
one  of  copper,  viz  : 

1 .  A  golden  piece  equal  in  value  to  10  dollars. 

2.  The  unit  or  dollar  itself  of  silver. 

3.  The  tenth  of  a  dollar  of  silver  also. 

4.  The  hundredth  of  a  dollar  of  copper. 

A  great  deal  of  small  change  is  useful  in  a  state, 
and  tends  to  reduce  the  prices  of  small  articles. 
Perhaps  it  would  not  be  amiss  to  coin  three  more 
pieces  of  silver,  one  of  the  value  of  five-tenths  or 
half  a  dollar,  one  of  the  value  of  two-tenths,  which 
would  equal  to  the  Spanish  pistareen,  and  one  of 
the  value  of  5  coppers,  which  would  be  equal  to 
the  Spanish  half  bit.  We  should  then  have  four 
silver  coins,  viz : 

1.  The  unit  or  dollar. 

2.  The  half  dollar  or  five-tenths. 


19 

3-     The  double  tentli,  equal  to  two-tenths,  or 
-^  of  a  dollar,  also  to  a  pistareen. 

4.  The  tenth,  equal  to  a  Spanish  bit. 

5.  The  five  copper  piece,  equal  to  .05  or  ^^^ 

of  a  dollar  or  to  the  half  bit. 

Thomas  Jefferson. 


1 

1 0 

1 

'So 


Dollars. 

5- 

r 

or 

1  • 

.50 

or 

.25 

or 

.10 

or 

•05 

or 

01 

or 

.005 

May  13,  1785. 
The  following  forms  of  money  are  submitted 

I  piece  of  gold  of 

I       "      of  silver  of 

I       " 

I 

I 

1 

I  piece  of  copper  of    .         .         .         .    yig 

'  •         •         •         ^00 

Report  of  Grand  Committee  on  tJte  Money  Unit. 


April  28,  1791. 

As  it  will  be  easy  to  add,  it  will  be  most  ad- 
visable to  begin  with  a  small  number,  till  exper- 
ience shall  decide  whether  any  other  kinds  are 
necessary. 

The  following,  it  is  conceived,  will  be  sufficient 
in  the  commencement : 

One  gold  piece,  equal  in  weight  and  value  to 
ten  units  or  dollars. 


20 

One  gold   piece,   equal  to  a  tenth  part  of  the 
former,  and  which  shall  be  a  unit  or  dollar. 

One  silver  piece,  which  shall  also  be  a  unit  or 
dollar. 

One  silver  piece,  which  shall  be,  in  weight  and 
value,  a  tenth  part  of  the  silver  unit  or  dollar. 

One  copper  piece,  which  shall  be  of  the  value 
of  a  hundreth  part  of  a  dollar. 

One  other  copper  piece,  which  shall  be  half  the 
value  of  the  former. 

Alexander  Hamilton, 

Secretary  of  the  Treasury. 


coinage  law  of  april  2,  1 792. 
Section  9.    And   be    it    further    enacted, 

THAT  there  shall  BE  FROM  TIME  TO  TIME  STRUCK 

and  coined  at  the  said  mint,  coins  of  gold, 
silver  and  copper,  of  the  following  denomi- 
nations, values,  and  descriptions,  viz: 
Gold  Eagles:    Each  to  be  of  the  value  of 

TEN  DOLLARS    OR    UNITS.      HaLF   EaGLES  :      EaCH 

to  be  of  the  value  of  five  dollars.  quarter 
Eagles  :  Each  to  be  of  the  value  of  two 
and  a  half  dollars.  silver  dollars  or 
Units:  Each  to  be  of  the  value  of  the 
Spanish  Milled  dollar  as  the  same  is  now 
CURRENT.  Half  Dollars  :  Each  to  be  of 
half  the  value  of  the  dollar  or  unit. 
Quarter  Dollars  :  Each  to  be  of  one-fourth 
the  value  of  the  dollar  or  unit.     dismes  : 


21 


Each  to  be  of  the  value  of  one-tenth  of  a 

DOLLAR    OR    UNIT.      HaLF   DiSMES  :     EACH    TO  BE 

of  the  value  of  one-twentieth  of  a  dollar. 
Copper  Cents  :  Each  to  be  of  the  value  of  one- 
hundredth  PART  OF   A   dollar.      HaLF   CeNTS  : 

Each  to  be  of  the  value  of  half  a  cent. 


IV.— ALLOY,  CHARACTER  AND  WEIGHT. 

January  15,  1782. 

Without  noticing  the  preference  given  to  one 
foreign  coin  over  another,  it  is  sufficient  to  ob- 
serve, that  if  a  greater  alloy  should  be  introduced 
by  the  Spanish  Government  into  their  dollars, 
our  interior  Regulations  as  to  Money  would  be 
overturned,  and  certainly  we  have  no  security 
that  this  will  not  happen. 

Robert  Morris, 
Superintendent  of  Finance. 


--- ,  1783. 

The  quantum  of  alloy  is  also  to  be  decided. 
The  silver  coins  assayed  by  Sir  Isaac  Newton 
varied  \\  to  76  pennyweight  alloy  in  the  pound 
troy  of  mixed  metal.  The  British  standard  has 
18  dwt.  The  Spanish  coins  assayed  by  Sir  Isaac 
Newton  have  from  18  to  19!^  dwt.  The  new^ 
French  crown  has  in  fact  19^,  though  by  its  edict 
it  should  have  20  dwt.,  that  is  -^^,    Let  the  Legis- 


latures  fix  the  alloy  of  furniture  plate  at  i8  dwt., 
the  British  standard,  and  Congress  that  of  their 
coin  at  one  ounce  in  the  pound,  the  French 
standard.  This  proportion  has  been  found  con- 
venient for  the  alloy  of  gold  coin  and  it  will 
simplify  the  system  of  our  Mint  to  alloy  both 
metals  in  the  same  degree. 

In  preparing  an  Ordinance  for  establishing  the 
unit  of  money  within  the  United  States,  let  it 
provide :  That  the  alloy  of  the  said  coins  of 
gold  and  silver  shall  be  equal  in  weight  to  one 
eleventh  part  of  the  line  metal. 

Thomas  Jefferson. 


Augusts,  1786. 
Resolved:  That   the    Standard    of    the    United 
States  of  America  for  gold   and  silver,  shall  be 
eleven  parts  fine,  and   one  part  alloy. —  The  Resolu- 
tion of  Coinage,  Continental  Congress. 


April  28,  1791. 

By  the  Resolution  of  the  8th  of  August,  1786, 
alloy  is  regulated  to  one-twelfth,  or  in  other  words, 
at  I  part  alloy  to  1 1  parts  fine  whether  gold  or 
silver ;  which  appears  to  be  a  convenient  rule. 

This  i-atio,  as  it  regards  gold,  coincides  with  the 
proportion,  real  or  professed,  in  the  coins  of 
Portugal,  England,  France  and  Spain.  In  those 
of  the  two  former,  it  is  real ;  in  those  of  the  two 


23 

latter,  there  is  a  deduction  lor  what  is  called 
Remedy  of  tv eight  and  alloy,  which  is  in  the  nature 
of  an  allowance  to  the  master  of  the  mint  for 
errors  and  imperfections  in  the  process ;  rendering 
the  coin  either  lighter  or  baser  than  it  ought  to 
be.  The  same  thing  is  known  in  the  theory  of 
the  English  Mint,  where  ^  of  a  carat  is  allowed. 
But  the  difference  seems  to  be,  that  there,  it  is 
merely  an  occasional  indemnity  within  a  certain 
limit,  for  real  and  unavoidable  errors  and  im- 
perfections, whereas,  in  the  practice  of  the  Mints 
of  France  and  Spain,  it  appears  to  amount  to  a 
stated  and  regular  deviation  from  the  nominal 
standard.  Accordingl}^  the  real  standard  of 
France  and  Spain  are  something  worse  than  22 
carats,  or  11  parts  in  12  fine. 

The  principal  gold  coins  in  German}^  Holland, 
Sweden,  Denmark,  Poland,  and  Italy,  are  finer 
than  those  of  England  and  Portugal,  in  different 
degrees,  from  i  carat  and  5  to  i  carat  and  |,  which 
last  is  within  |-  of  a  carat  of  pure  gold. 

There  are  similar  diversities  in  the  standards  of 
the  silver  coins  of  the  different  countries  of  Europe. 
That  of  Great  Britain  is  222  parts  fine,  to  18  alloy  ; 
those  of  the  other  European  nations  vary  from 
that  of  Great  Britain  as  widely  as  from  about  17 
of  the  same  parts  better,  to  75  worse. 

Considerations  of  expediency  lead  to  taking  as 
our  models  those  nations  with  whom  we  have  the 
most  intercourse,  and  whose  coins  are  most  preva- 
lent in  our  circulation.  These  are  Spain,  Portugal, 
England  and  France. 


24 

It  is  apprehended  that  there  are  considerations 
which  may  render  it  prudent  to  establish  by  law, 
that  the  proportion  of  silver  to  copper  in  the  gold 
coins  of  the  United  States  shall  not  be  more  than 
)^,  nor  less  than  J^  ;  vesting  a  discretion  in  some 
proper  place  to  regulate  the  matter  within  those 
limits,  as  experience  in  the  execution  may  recom- 
mend. 

Alexander  Hamilton. 

Secretary  of  the  Treasury. 


coinage  law  of  april  2,  1 792. 

Section  12.  And  be  it  further  enacted, 
that  the  standard  for  all  gold  coins  of 
THE  United  States  shall  be  eleven  parts  fine 

TO  ONE  PART  ALLOY  ;  AND  ACCORDINGLY  THAT 
eleven  parts  IN  TWELVE  OF  THE  ENTIRE  WEIGHT 
OF  EACH  OF  THE  SAID  COINS  SHALL  CONSIST  OF 
PURE  GOLD,  AND  THE  REMAINING  ONE-TWELFTH 
PART  OF  ALLOY  ;  AND  THE  SAID  ALLOY  SHALL  BE 
COMPOSED  OF  SILVER  AND  COPPER  IN  SUCH  PRO- 
PORTIONS NOT  EXCEEDING  ONE-HALF  SILVER  AS 
SHALL  BE  FOUND  CONVENIENT  ;  TO  BE  REGULATED 
BY  THE  DIRECTOR  OF  THE  MiNT,  FOR  THE  TIME 
BEING,  WITH   APPROBATION  OF  THE  PRESIDENT   OF 

THE  United  States,  until  further  provision 

SHALL  BE  MADE  BY  LAW.  AnD  TO  THE  END  THAT 
THE  NECESSARY  INFORMATION  MAY  BE  HAD  IN 
ORDER  TO  THE  MAKING  OF  SUCH  FURTHER  PRO- 
VISION, IT  SHALL   BE  THE  DUTY   OF  THE   DIRECTOR 


25 

OP'  THE  Mint,  at  the  eximration  ok  a  vkak 
after  commencing  the  operations  of  the  said 
Mint,  to  report  to  Cong'ress  the  practice 
thereof  during  the  said  year,  touching  the 
composition  of  the  alloy  of  the  said  gold 
coins,  the  reasons  for  such  practice,  and 
the  experiments  and  observation  which  shall 
have  been  made  concerning  the  effects  of 
different  proportions  of  silver  and  copper 
in  the  said  alloy. 

Section  13.  And  be  it  further  enacted, 
that  the  standard  of  all  silver  coins  of  the 
United  States,  shall  be  one  thousand,  four 
hundred  and  eighty-five  parts  of  fine  to  one 
hundred  and  seventy-nine  parts  alloy  ;  and 
accordingly  that  one  thousand,  four  hun- 
dred and  eighty-five  parts  in  one  thousand, 
six  hundred  and  sixty-four  parts  of  the 
entire  weight  of  each  of  the  said  coins 
shall  consist  of  pure  silver,  and  the  re- 
maining one  hundred  and  seventy-nine  parts 
of  alloy  ;  which  alloy  shall  be  wholly  of 

COPPER. 


v.— CHARGES   FOR  COINAGE. 

January  15,  1782. 

In  England  the  expense  of  coinac^e  is  paid  by 
the  Crown,  and  of  course  it  is  raised  by  taxes 
from  the  people.     In  France  the  Coinage  instead 


26 

ot  being  expensive,  yields  a  profit.     This  coining 
(profit)  is  about  8  per  cent. 

It  appears  proper  that  the  price  of  coining 
should  be  defrayed  by  the  coinage,  because,  first  it 
is  natural  and  proper  that  the  price  should  be  paid 
when  the  benefit  is  received,  and  that  the  citizen 
in  return  for  the  advantage  of  being  ascertained 
in  the  value  of  the  medium  of  commerce  by  the 
Sovereign,  should  pa}^  for  ascertaining  it,  just  as 
that  he  should  pay  for  the  fashion  of  the  plate  he 
uses,  or  the  construction  of  the  cart  he  employs  ; 
and  it  is  proper  that  the  coinage  should  only 
defray  the  expense,  without  making  a  considerable 
profit. 

Robert  Morris, 
Superintendent   of  Finance. 


May  13,  1785. 

What  is  the  best  way  of  defraying  the  expense  of 
coinage  ?  Different  nations  have  adopted  different 
systems.  The  British  value  silver  when  coined,  no 
higher  than  bullion;  hence  it  follows  that  the  ex- 
pense of  the  Mint,  increasing  the  civil  list,  must 
be  paid  by  a  general  tax  ;  and  tradesmen  are  dis- 
posed to  work  up  the  current  coin,  by  Avhich  the 
tax  is  increased  and  continued.  In  some  other 
countries  silver  or  gold  when  coined,  are  valued 
above  the  price  of  bullion  ;  whence  tradesmen  are 
discouraged  from  melting  or  working  up  the  cur- 
rent coin,  and  the   mint  is  rather  profitable   than 


burdensome.  Certainly  there  arc  good  and  con- 
clusive reasons  why  we  should  value  the  national 
coin  above  the  price  of  bullion,  but  there  is  a  cer- 
tain point  beyond  which  we  may  not  proceed,  lest 
we  encourage  counterfeits,  or  private  imitations 
of  our  coin.  It  has  been  proposed  to  make  a  dif- 
ference of  2^  per  cent,  merely  as  allowance  for 
the  coinage  of  gold,  and  of  3.013  per  cent,  for  the 
coinage  of  silver.  It  is  probable  that  3  per  cent, 
would  more  than  defray  the  expense  of  coining 
silver,  in  which  case  it  would  be  a  temptation  to 
private  imitation,  and  would  operate  against  the 
free  circulation  of  the  money  as  being  valued  too 
high.  It  is  to  be  remembered  that  silver  coin 
ought  to  be  encouraged,  and  probably  2  per  cent, 
would  be  a  proper  difference  between  silver  coin 
and  bullion  ;  the  same  difference  to  be  made  in  the 
price  of  gold. — Report  of  a  Grand  Coviuiittec  on  the 
Money  Unit. 


Monday,  October  16,  1786. 

For  every  pound  troy  weight  of  uncoined  gold 
or  foreign  gold  coin,  1 1  parts  fine  and  one  part 
allo}^  209  dollars,  7  dismes  and  7  cents,  money  of 
the  United  States,  as  established  by  the  resolves 
of  Congress  of  the  8th  of  August  last,  and  so  in 
proportion  to  the  fine  gold  contained  in  any  coined 
or  uncoined  gold  Avhatsoever. 

For  every  pound  troy  weight  of  uncoined  silver 
or  foreign  silver  coin,  11  parts  fine  and  one_part 


2§ 

alloy,  13  dollars,  7  dismes,  7  cents  and  7  mills, 
money  of  the  United  States,  established  as  afore- 
said ;  and  so  in  proportion  to  the  fine  silver  con- 
tained in  any  coined  or  uncoined  silver  whatso- 
ever.— Mint  Ordinance. 

(Note. — The  mint   charge  thus  fixed  is  about 
two  per  cent.,  upon  both  gold  and  silver.) 


April  28,  1791. 

A  third  point,  whether  the  expense  of  coining 
shall  be  defrayed  by  the  public,  or  out  of  the  ma- 
terial itself ;  or,  as  it  is  sometimes  stated,  whether 
coinage  shall  be  free,  or  shall  be  subject  to  a  duty 
or  imposition  ?  This  forms,  perhaps,  one  of  the 
nicest  questions  in  the  doctrine  of  money. 

The  practice  of  different  nations  is  dissimilar  in 
this  particular.  In  England,  coinage  is  said  to  be 
entirely  free ;  the  mint  price  of  the  metals  in  bul- 
lion being  the  same  with  the  value  of  them  in 
coins.  In  France,  there  is  a  duty,  which  has  been, 
if  it  is  not  now,  eight  per  cent.  In  Holland,  there 
is  a  difference  between  the  mint  price  and  the 
value  in  the  coins,  which  has  been  computed  at 
.96,  or  something  less  than  one  per  cent ,  upon 
gold  ;  at  1.48,  or  something  less  than  one  and  a 
half  per  cent.,  upon  silver.  The  resolution  of  the 
8th  of  August,  1786,  proceeds  upon  the  idea  of  a 
deduction  of  a  half  per  cent,  from  gold,  and  of 
two   per  cent,  from  silver,  as  an   indemnification 


29 

for  the  expense  of  coining.  This  is  inferred  from 
the  report  of  the  late  board  of  treasury  upon 
which  that  resolution  appears  to  have  been 
founded. 

Upon  the  supposition  that  the  expense  of  coin- 
age ought  to  be  defrayed  out  of  the  metals,there  are 
two  ways  in  which  it  miy  be  effected  ;  one,  by  a 
reduction  of  the  quantity  of  fine  gold  or  fine  silver 
in  the  coins  ;  the  other,  by  establishing  a  differ- 
ence between  the  value  of  those  metals  in  the 
coins,  and  the  mint  price  of  them  in  bullion. 

The  first  method  appears  to  the  Secretary  inad- 
missible. 

The  second  method  of  defraying  the  expense  of 
the  coinage  out  of  the  metals  is  greatly  to  be  pre- 
ferred. This  is  to  let  the  same  sum  of  money 
continue  to  represent  in  the  new  coins  exactly  the 
same  quantity  of  gold  or  silver  as  it  does  in  those 
now  current ;  to  allow  at  the  mint  such  a  price 
only  for  these  metals  as  will  admit  of  profit  just 
sufficient  to  satisfy  the  expense  of  coinage. 

The  expectation  of  commercial  advantages 
ought  not  to  decide  in  favor  of  a  duty  on  coinage. 
If  it  should  be  adopted,  it  ought  not  to  be  in  the 
form  of  a  deduction  from  the  intrinsic  value  of 
the  coins,  and  should  absolutely  exclude  the  idea 
of  any  difference  whatever  between  the  value  of 
the  metals  in  coin  and  in  bullion.  It  is  not  clearly 
discerned  that  a  small  difference  between  the  mint 
price  of  bullion,  and  the  regulated  value  of  the 
coins,  would  be  pernicious,  or  that  it  might  not 
even  be  admissible,  in  the   first  instance,  by  way 


30 

of  experiment,  merely  as  a  preventive  in  the  melt- 
ing down  and  exportation  of  the  coins. 

The  arguments  for  a  coinage  entirely  free  are, 
that  it  preserves  the  intrinsic  value  of  the  metals ; 
that  it  makes  the  expense  of  fabrication  a  general 
instead  of  a  partial  tax  ;  and  that  it  tends  to  pro- 
mote the  abundance  of  gold  and  silver,  which,  it 
is  alleged,  will  flow  to  that  place  where  they  find 
the  best  price,  and  from  that  place  where  they 
are  in  any  degree  undervalued. 

It  is,  however,  not  probable,  that  a  very  small 
difference  of  value  between  coin  and  bullion  can 
have  any  effect  which  ought  to  enter  into  calcula- 
tion. 

Under  an  impression  that  a  small  difference  be- 
tween the  value  of  the  coin  and  the  mint  price  of 
bullion,  is  the  least  exceptional  expedient  for  re- 
straining the  melting  down,  or  exportation  of  the 
former,  and  not  perceiving  that,  if  it  be  a  very 
moderate  one,  it  can  be  hurtful  in  other  respects — 
the  Secretary  is  inclined  to  an  experiment  of  one- 
half  per  cent,  on  each  of  the  metals.  It  does  not 
seem  to  be  advisable  to  make  any  greater  differ- 
ence in  regard  to  silver  than  to  gold  ;  because  it 
is  desirable  that  the  proportion  between  the  two 
metals  in  the  market,  should  correspond  with 
that  in  the  coins,  which  would  not  be  the  case  if 
the  mint  price  of  one  was  comparatively  lower 
than  that  of  the  other;  and  because,  also,  silver 
being  proposed  to  be  rated  in  respect  to  gold, 
somewhat  below  its  general  commercial  value,  if 
there  should  be  a  disparity  to  its  disadvantage  in 


3i 

the  mint  prices  of  the  two  metals,  it  would  ob- 
struct too  much  the  bringing  of  it  to  be  coined 
and  would  add  an  inducement  to  export  it.  Nor 
does  it  appear  to  the  Secretary  safe  to  make  a 
greater  difference  between  the  value  of  coin  and 
bullion,  than  has  been  mentioned. 

Alexander  Hamilton, 
Secretary  of  the  Treasury, 


February        ,  1792. 

As  to  the  question  on  whom  the  expense  of 
coinage  is  to  fall,  I  have  been  so  little  able  to 
make  up  an  opinion  satisfactory  to  myself  as  to 
be  ready  to  concur  in  either  decision. 

Thomas  Jefferson. 


coinage  law  of  april  2,  1 792. 

Section  14.  And  be  it  further  enacted, 
that  it  shall  be  lawful  for  any  person  or 
persons  to  bring  to  the  said  mint  gold  and 
silver  bullion  in  order  to  their  being 
coined  ;  and  that  the  bullion  so  brought 
shall  be  there  assayed  and  coined  as 
speedily  as  may  be  after  the  receipt  there- 
of, and  that  free  of  expense  to  the  person 
or   persons  by  whom   the  same   shall  have 

BEEN  BROUGHT.  AnD  AS  SOON  AS  THE  SAID 
BULLION  SHALL  HAVE  BEEN  COINED,  THE  PER- 
SON   OR    PERSONS     BY     WHOM     THE     SAME    SHALL 


32 

HAVE  BEEN  DELIVERED,  SHALL  UPON  DEMAND 
RECEIVE  IN  LIEU  THEREOF  COINS  OF  THE  SAME 
SPECIES  OF  BULLION  WHICH  SHALL  HAVE  BEEN 
SO  DELIVERED,  WEIGHT  POR  WEIGHT,  OF  PURfe 
GOLD  OR  PURE  SILVER  THEREIN  CONTAINED  ; 
PROVIDED.  NEVERTHELESS,  THAT  IT  SHALL  BE  AT 
THE  MUTUAL  OPTION  OF  THE  PARTY  OR  PARTIES 
BRINGING  SUCH  BULLION,  AND  OF  THE  DIREC- 
TION OF  THE  SAID  MINT,  TO  MAKE  AN  IMMEDI- 
ATE EXCHANGE  OF  COINS  FOR  STANDARD  BULL- 
ION, WITH  A  DEDUCTION  OF  ONE-HALF  PER 
CENT.  FROM  THE  WEIGHT  OF  THE  PURE  GOLD, 
OR  PURE  SILVER  CONTAINED  IN  THE  SAID  BULL- 
ION, AS  AN  INDEMNIFICATION  TO  THE  MINT  FOR 
THE  TIME  WHICH  WILL  NECESSARILY  BE  RE- 
QUIRED FOR  COINING  THE  SAID  BULLION,  AND 
FOR  THE  ADVANCE  WHICH  SHALL  HAVE  BEEN  SO 
MADE  IN  COINS.  -^  *  *  AnD  THE  SAID 
DEDUCTION  OF  ONE-HALF  PER  CENT.  SHALL  CON- 
STITUTE A  FUND  TOWARDS  DEFRAYING  THE  EX- 
PENSES  OF   THE   SAID    MINT. 


VI.— STANDARDS  OF  VALUE. 

January  15,  1782. 

Although  most  nations  have  coined  copper,  yet 
the  metal  is  so  impure  that  it  has  never  been  con- 
sidered as  constituting  the  money  standard.  This 
is  affixed  to  the  two  precious  metals,  because  they 
alone  will  admit  of  having  their  intrinsic  value 
precisely   ascertained ;    but   nations    differ    very 


33 

much  in  the  relation  they  have  established  between 
gold  and  silver.  In  some  European  countries  an 
ounce  of  pure  gold  passes  for  fifteen  ounces  of 
pure  silver  ;  in  others  for  fourteen.  In  China  it 
passes  for  much  less.  The  standard,  therefore, 
which  is  affixed  to  both  metals,  is  in  realit}'  affixed 
to  neither. 

Arguments  are  unnecessary  to  show  that  the 
scale  by  which  eveything  is  to  be  measured  ought 
to  be  as  fixed  as  the  nature  of  things  will  permit 
of.  Since,  therefore,  a  money  standard  affixed  to 
both  the  precious  metals  will  not  give  the  certain 
scale,  it  is  better  to  make  use  of  the  one  only. 
Gold  is  more  valuable  than  silver,  and  so  far  must 
have  the  preference,  but  it  is  from  that  very  cir- 
cumstance the  more  exposed  to  fraudulent  prac- 
tices. Its  value  rendering  it  more  portable  is  an 
advantage,  but  it  is  an  advantage  which  paper 
possesses  in  a  much  greater  degree,  and  of  con- 
sequence the  commercial  nation  of  England  has 
had  recourse  to  paper  for  the  purpose  of  its  Trade  ; 
although  the  mass  of  circulating  coin  is  gold.  It 
will  always  be  in  our  power  to  carry  a  paper  cir- 
culation to  every  proper  extent.  There  can  be  no 
doubt,  therefore,  that  our  money  standard  ought 
to  be  affixed  to  silver.  But  silver  is  liable  like 
everything  else  to  a  change  of  value,  if  there  is  a 
demand  for  it,  to  export,  the  value  will  rise,  if  the 
contrary  it  will  fall,  and  so  far  it  cannot  be  con- 
sidered as  a  fixed  measure  of  value. 

Robert  Morris, 
Super intende?it  of  Finance, 


34 

,,   1783. 

Just  principles  luill  lead  iis  to  disregard  legal  propor- 
tions altogether;  to  enqiiire  into  the  market  price  of 
gold  in  the  several  countries  zvith  ivhich  we  shall  prin- 
cipally be  connected  in  Commerce,  and  to  take  an 
average  from  them.  Perhaps  we  might  with  safety 
lean  to  a  proportion  somewhat  above  par  for 
gold,  considering  our  neighborhood  and  com- 
merce with  the  sources  of  the  coins  and  the 
tendency  which  the  high  price  of  gold  in  Spain 
has  to  draw  thither  all  that  of  their  mines,  leaving 
silver  principally  for  our  and  other  markets. 
Should  the  unit  be  fixed  at  365  grains  of  pure 
silver,  gold  at  15  to  i,  and  the  alloy  of  both  be 
one-twelfth  the  weight  of  the  coins  can  be  de- 
termined. 

The  quantity  of  fine  silver,  which  shall  consti- 
tute the  unit  being  settled  and  the  proportion  of 
the  value  of  gold  to  that  of  silver ;  a  table  should 
be  formed  from  assay,  classing  the  several  foreign 
coins  according  to  their  fineness,  declaring  the 
worth  of  a  pennyweight  or  grain  in  each  class 
and  that  they  shall  be  lawful  tender  at  those  rates 
if  not  clipped  or  otherwise  diminished,  and  where 
diminished,  offering  their  value  for  them  at  the 
mint,  deducting  the  expense  of  recoinage. 

Thomas  Jefferson. 


35 

May  13,  1785. 

Propositions  respecting  the  coinage  of  gold, 
silver  and  copper. 

I  St.  The  value  of  silver  compared  with  gold  : 
In  France  i  grain  of  pure  gold  is  counted  worth 
1 5  grains  of  silver.  In  Spain  16  grains  of  silver 
are  exchanged  for  i  of  gold,  and  in  England  15^. 
In  both  of  the  Kingdoms  last  mentioned,  gold  is 
the  prevailing  money,  because  silver  is  under 
valued.  In  France  silver  prevails.  Sundry  ad- 
vantages would  arise  to  us  from  a  system  by 
which  silver  might  become  the  prevailing  money. 
This  would  operate  as  a  bounty  to  draw  it  from 
our  neighbors  by  whom  it  is  not  sufficiently 
esteemed.  Silver  is  not  exported  so  easily  as 
gold  and  it  is  a  more  useful  metal. 

The  quantity  of  pure  silver  being  fixed  that  is 
to  be  in  the  unit  or  Dlr  and  the  relations  between 
silver  and  gold  being  fixed,  all  the  other  weights 
must  follow. — Report  of  a  Grand  Couiuiittee  on  the 
Money  Unit. 


Tuesday,  August  8,  1786. 
On  a  report  of  the  Board  of  Treasury, 
Resolved,  That  the  standard  of  the  United  States 
of   America  for  gold  and  silver,   shall  be  eleven 
parts  fine,  and  one  part  alloy. 

That  the  money  unit  of  the  United  States,  be- 
ing by  the  resolve  of  Congress  of  the  6th  of  July, 
1785,  a  dollar,  shall  contain  of  fine  silver,  375  yYo 
grains. 


36 

That  there  shall  be  two  gold  coins ;  one  con 
taining  246  j^^^^  grains  of  fine  gold,  equal  to  10 
dollars  and  to  be  stamped  with  the  impression  oi 
the  American  Eagle,  and  to  be  called  an  Eagle  : 

One  containing  123  ^y^^  grains  of  fine  gold, 
equal  to  5  dollars,  to  be  stamped  in  like  manner, 
and  to  be  called  a  half  Eagle. —  The  Resolutions  on 
Coinage,  Continental  Congress. 


April  28,  1791. 

TJie  circ2inistance  in  favor  of  the  dollar^  loses  much 
of  its  weight  from  tiuo  considerations^  that  species  of 
coin  has  never  had  any  settled  or  standard  value 
according  to  weight  or  fineness,  but  has  been  permitted 
to  circulate  by  tale,  zuithout  regard  to  either,  very 
much  as  a  mere  money  of  convenience,  while  gold  has 
had  a  fixed  price  by  weight,  and  with  an  eye  to  its 
fnotess.  This  greater  stability  of  value  of  the  gold 
coins,  is  an  argument  of  force  for  regarding  the 
money  unit  as  having  been  hitherto  virtually  attached 
to  gold,  rather  than  to  silver. 

If  each  of  them  (gold  and  silver)  be  as  valid  as 
the  other,  in  payments  to  any  amount,  it  is  not 
obvious  in  what  effectual  sense,  either  of  them 
can  be  deemed  the  Money  Unit,  rather  than  the 
other.  *  *  *  Perhaps,  if  either  were  to  be  pre- 
ferred, it  ought  to  be  gold  rather  than  silver.  *  *  * 
The  first  and  most  simple  impressions  do  not 
naturally  incline  to  giving  a  preference  to  the 
inferior  or  least  valuable  of  the  two  metals.  *  •*  * 


37 

If  gold  be  most  convenient  in  large  payments, 
silver  is  best  adapted  to  the  more  minute  and 
ordinary  circulation. 

The  Unit,  in  the  coins  of  the  United  States, 
ought  to  correspond  with  24  grains  and  f  of  a 
grain  of  pure  gold,  and  with  371  grains  and  J  of  a 
grain  of  pure  silver,  each  answering  to  a  dollar 
in  the  money  of  account.  The  former  is  exactly 
agreeable  to  the  present  value  of  gold,  and  the 
latter  is  within  a  fraction  of  the  mean  of  the  two 
last  emissions  of  dollars— the  only  ones  which  are 
now  found  in  common  circulation,  and  of  which 
the  newest  is  in  the  greatest  abundance. 

Alexander  Hamilton, 

Secretary  of  the  Treasury. 


colnage  law  of  april  2,  1 792. 

Section  9.  And  be  it  further  enacted,  that 
there  shall  be  from  time  to  time  struck  and 
coined  at  the  said  mint,  coins  of  gold,  silver 
OR  COPPER.  *  *  *  Eagles  (gold)  each  to  be  of 
the  value  of  ten  dollars  or  units.  *  *  * 
Dollars  (silver)  or  units. 


38 

V1I.--RATIO  OF  VALUE  BETWEEN  GOLD 
AND  SILVER. 

April  19,  1776. 

Resolved: — That  the  several  Gold  and  Silver 
Coins  passing  in  the  said  Colonies  shall  be  received 
into  the  public  treasury  of  the  Continent,  and 
paid  out  in  exchange  for  bills  emitted  by  author- 
ity of  Congress,  when  the  same  shall  become  due, 
at  the  rates  set  down  in  the  following  table  : 

Report  of  a  Committee  appointed  to  aseertain  the 
relative  value  of  current  specie^  and  its  relation  to  the 
Spanish  milled  dollar^  etc,  Continental  Congress. 

Note  :  The  relation  indicated  in  this  table 
between  the  English  guineas  and  English  crowns 
supposing  tJiem  to  be  of  full  iveight,  is  nearly  the 
English  legal  ratio  of  16.21  to  i. 


January  15,  1782. 

In  England  gold  is  to  silver  nearly  in  the  pro- 
portion of  one  to  fifteen,  and  in  France  nearly  of 
one  to  fourteen.  If  a  man  carries  fourteen  ounces 
of  gold  from  France  to  England  he  receives  two 
hundred  and  ten  ounces  of  silver  which  in  France 
purchases  fifteen  ounces  of  gold,  so  that  he  gains 
on  that  exchange  one  ounce  of  gold.  In  like 
manner  he  who  carries  from  England  fourteen 
ounces  of  silver  to  France  receives  one  ounce  of 
gold,  which  in  England  purchases  fifteen  ounces 


39 

of  silver,  and  therefore  he  gains  on  that  exchange 
one  ounce  of  silver. 

If  it  be  then  supposed  that  the  coins  of  these 
two  countries  were  alike  pure,  it  must  follow  that 
in  a  short  time  all  the  gold  coin  of  full  weight 
would  be  in  England  :  and  all  the  silver  coin  of 
full  weight  in  France.  But  the  light  silver  cir- 
culatmg  in  England  and  the  light  gold  in  France, 
the  real  standard  of  coin  in  each  would  be  different 
from  the  legal,  and  seek  a  medium  of  fourteen  and 
a  half  of  silver  for  one  of  gold,  although  the  legal 
standard  (ratio)  might  be  in  one  place  fifteen,  and 
in  the  other  fourteen. 

The  demand  which  commerce  might  make  for 
any  one  of  the  precious  metals  in  preference  to 
the  other,  would  vary  this  real  standard  (com- 
mercial ratio)  from  time  to  time,  and  in  every  pay- 
ment a  man  would  get  more  or  less  of  real  value 
for  his  debt,  according  as  he  was  paid  in  the  coin 
of  greater  or  lesser  nature,  in  relation  to  the  real 
standard  (commercial  ratio).  If,  for  instance,  the 
debt  were  contracted  when  the  silver  was  to  gold, 
as  one  to  fifteen,  and  paid  when  as  one  to  fourteen  ; 
if  the  debt  were  paid  in  silver  he  would  gain  one- 
thirtieth,  and  if  in  gold  he  would  lose  one- 
thirtieth. 

Robert   Morris, 
Superintendent  of  Finanee. 


40 

i2th  December,  1782. 

Ordinance  Proposed  for  the  Valuation  of 
Foreign  Coins. 

After  the  first  day  of  January  in  the  year  of  our 
Lord  one  thousand  seven  hundred  and  eighty- 
three,  English  silver  coin  be  received  at  the  rate 
of  one  dollar  and  sixteen-ninetieths  of  a  dollar  by 
the  ounce,  Dutch  silver  coin  at  the  rate  of  one 
dollar  and  fifteen-ninetieths  by  the  ounce,  French 
silver  coin  at  the  rate  of  one  dollar  and  fourteen 
ninetieths,  Portugeeze  silver  coin  at  the  rate  of 
one  dollar  and  thirteen-ninetieths  by  the  ounce, 
English,  Spanish  and  Portugeeze  gold  coin  at  the 
rate  of  seventeen  dollars  by  the  ounce,  and  French 
gold  coin  at  the  rate  of  sixteen  dollars  and  sixty- 
eight  ninetieths  by  the  ounce. 

I  take  the  liberty  to  observe.  Sir,  that  this  esti- 
mation of  coins  is  formed  upon  the  quantity  of 
alloy  which  they  respectively  contain. 

The  weight  of  each  particular  piece  current 
among  us  is  so  indeterminate  that  the  value  by 
tale  (denomination)  cannot  be  fixed  ;  but  when- 
ever the  rates  at  which  they  go  as  bullion  are 
known,  a  table  may  be  formed  in  each  state  for  the 
tale  according  to  the  customary  weights  which 
prevail. 

Robert  Morris, 
Superintendent  of  Finajice. 

(Note :  The  rating  of  English  standard  silver  at 
I  yVy  dollars  per  ounce  implies  that  the  "  dollar  " 
should  contain  377.02  grains  of  pure  silver,  and  the 


41 

rule  that  seventeen  of  these  dollars  should  be 
equivalent  to  an  ounce  of  English  standard  gold 
implies  that  this  dollar  was  equivalent  of  25.882 
grains  of  pure  gold.  The  ratio  between  the  two 
metals  as  thus  fixed  is  i  to  14.56,  which  very 
nearly  coincides  with  the  then  French  legal  ratio, 
and  with  the  market  ratio  of  the  metals  in  Europe.) 


1783. 

llie  proportion  between  the  values  of  gold  and 
silver  is  a  mercantile  problem  altogether.  It 
would  be  inaccurate  to  fix  it  by  the  popular  ex- 
changes of  a  half  Joe  for  eight  dollars,  a  Louis  for 
4  French  crowns  or  five  Louis  for  23  dollars.  The 
first  of  these  would  be  to  adopt  the  Spanish  pro- 
portion between  gold  and  silver;  the  second  the 
French,  the  third  a  mere  popular  barter,  wherein 
convenience  is  consulted  more  than  accuracy.  The 
legal  proportion  in  Spain  is  16  for  i,  in  England 
15^  for  I,  in  France  (uncertain  in  the  U.  S.  in 
printed  copy)  1 5  for  i.  The  Spaniards  and  English 
are  found  in  experience  to  retain  an  over  propor- 
tion of  gold  coins  and  to  lose  their  silver.  The 
French  have  a  greater  proportion  of  silver.  The 
difference  at  market  has  been  on  the  decrease. 
The  Financier  states  it  at  present  at  14^  for  i. 

Just  principles  will  lead  us  to  disregard  legal 
(foreign  legal)  proportions  altogether ;  to  enquire 
into  the  market  price  of  gold  in  the  several  coun- 
tries with  which  we  shall  principally  be  connected 


42 

in  commerce,  and  to  take  an  average  from  them. 
Perhaps,  we  might  with  safety  lean  to  a  propor- 
tion somewhat  above  par  for  gold,  considering  our 
neighborhood  and  commerce  with  the  sources  of 
the  coins  and  the  tendency  which  the  high  price 
of  gold  in  Spain  has  to  draw  thither  all  that  of 
their  mines,  leaving  silver  principally  for  our  and 
other  markets.  It  is  not  impossible  that  15  for  i 
may  be  found  an  eligible  proportion.  I  state  it, 
however,  as  conjectural  only. 

Suppose  then  they  (the  Committee  of  States) 
be  instructed :  To  appoint  proper  persons  to  en- 
quire what  are  the  proper  proportions  between  the 
values  of  fitie  gold  and  fine  silver  at  the  markets,  of 
the  several  countries  ivith  which  ive  are  or  probably 
may  be  comiected  and  what  should  be  the  proper  pro- 
portions here,  having  regard  to  the  average  of  their 
values  at  those  markets  and  to  other  circum- 
stances and  to  report  the  same  to  the  Committee 
to  be  by  them  laid  before  Congress. 

Thomas  Jefferson. 


May  13,  1785. 

Propositions  respecting  the  coinage  of  gold, 
silver  and  copper. 

ist.  The  value  of  silver  compared  with  gold. 

In  France  i  grain  of  pure  gold  is  counted  worth 
15  grains  of  silver.  In  Spain  16  grains  of  silver 
are  exchanged  for  one  of  gold  and  in  England  i5|^. 

Certainly  our  exchange  should  not  be  more  than 


43 

15  grains  of  silver  for  i  of  gold.  It  has  been 
alledged  by  the  late  Financier  that  we  should  not 
give  more  than  14^,  perhaps  14!  would  be  a  better 
medium  considering  the  quantity  of  gold  that  may 
be  expected  from  Portugal. — Report  of  a  Grand 
Coniniittee  on  the  Money  Unit,  Continental  Congress. 


April  8,  1786. 

The  coinage  system  proposed  to  Congress  by 
the  Board  of  Treasury. 

The  report  was  in  triplicate  : 

Report  No.  i  proposed  a  ratio  of  15.256  between 
coins. 

Note  :  The  intention  was  expressed  of  fixing 
the  relative  price  of  Bullion  at  the  Mint  of  15.47, 
but  the  mint  price  was  not  fixed  to  correspond 
to  this  intention.  In  the  choice  of  the  ratio  the 
Board  alludes  to  the  ratio  prevailing  at  that 
time  in  America  at  15.60,  but  do  not  mention  the 
details  upon  which  the  statement  was  based. 

Report  No.  2  proposes  the  relative  price  of 
Bullion  at  the  Mint  at  14.97,  the  ratio  of  the  Coin, 
14.749. 

Report  No.  3  proposes  the  ratio  of  the  Coin  at 
15  to  I,  while  the  relative  price  of  Bullion  would 
be  15.22. 

Samuel  Osgood. 
Walter  Livingston. 


44 

Monday,  October  i6,  1786. 
It  is  hereby  ordered  : 

An  Assay  Master,  whose  duty  it  shall  be  to  re- 
ceive gold  and  silver  in  bullion,  or  foreign  coin,  to 
assay  same  and  to  give  his  certificates  for  the  value 
thereof  at  the  following  rates  : 

For  every  pound  troy  weight  of  uncoined  gold 
or  foreign  gold  coin,  eleven  parts  fine  and  one  part 
alloy,  209  dollars,  7  dismes  and  7  cents,  money  of 
the  United  States,  as  established  by  the  resolves 
of  Congress  of  the  8th  of  August  last,  and  so  in 
proportion  to  the  fine  gold  contained  in  any  coined 
or  uncoined  gold  whatsoever. 

For  every  pound  troy  weight  of  uncoined 
silver,  or  foreign  silver  coin,  eleven  parts  fine  and 
one  part  alloy,  13  dollars,  7  dismes,  7  cents  and  7 
mills,  money  of  the  United  States,  established  as 
aforesaid  ;  and  as  in  proportion  to  the  fine  silver 
contained  in  any  coined  or  uncoined  silver  what- 
soever.— Mint  Ordinance. 

Note  :  The  mint  charge,  fixed  is  about  two  per 
cent,  upon  both  gold  and  silver,  bringing  the  rate 
of  bullion  at  the  mint  to  15.22,  a  little  below  the 
ratio  in  the  coin. 


April  28,  1791. 

The  difference  established  by  custom  in  the 
United  States,  between  coined  gold  and  coined 
silver  has  been  stated,  upon  another  occasion,  to  be 
nearly  as  i  to  15.6.     This,  if  truly  the  case,  would 


45 

imply  that  gold  was  extremely  over  valued  in  the 
United  States ;  for  the  highest  actual  proportion,  in 
any  part  of  Europe,  very  little,  if  at  all,  exceeds  i 
to  15;  and  the  average  proportion  throughout 
Europe  is  probably  not  more  than  about  i  to  14.8. 
But  that  statement  has  proceeded  upon  the  idea 
of  the  ancient  dollar.  The  pennyweight  of  gold 
of  twenty-two  carats  fine,  at  6s.  8d.,  and  the  old 
Seville  piece  of  386  grains  and  15  mits  of  pure 
silver,  at  7s.  6d.,  furnishes  the  exact  ratio  of  i  to 
15.6262.  But  this  does  not  coincide  zvitJi  the  real 
difference  bctzveen  the  metals  in  our  market,  or, 
tvJiich  is  ivith  us  the  same  thing,  in  our  currency. 
To  determine  this,  the  quantity  of  fine  silver  in 
the  general  mass  of  the  dollars  now  in  circulation 
must  afford  the  rule.  Taking  the  rate  of  the  late 
dollar  of  374  grains,  the  proportion  would  be  as 
I  to  1 5.1 1.  Taking  the  rate  of  the  newest  dollar 
the  proportion  would  be  as  i  to  14.87.  The  mean 
of  the  two  would  give  the  proportion  of  i  to  15, 
very  nearly ;  less  than  the  legal  proportion  in  the 
coins  of  Great  Britain,  which  is  as  i  to  15.2  ;  but 
is  somewhat  more  than  the  actual  or  market  pro- 
portions, which  is  not  quite  i  to  15. 

If  then  the  unit  ought  tiot  to  be  attached  exclusively 
to  either  of  the  metals,  the  proportion  zvJiicJi  ought  to 
subsist  between  them  in  the  coins^  becomes  a  prelimi- 
nary inquiry,  in  order  to  its  proper  adjustment.  This 
proportion  appears  to  be,  in  several  views,  of  no  in- 
considerable moment. 

One  consequence  of  over  valuing  either  metal,  in 
respect  to  the  others,  is  the  banisJiment  of  that  zvhich 


46 

is  under  valued.  If  two  countries  are  supposed 
in  one  of  which  the  proportion  of  gold  to  silver 
is  as  I  to  1 6,  in  the  other  as  i  to  15,  gold  be- 
ing worth  more,  silver  less,  in  one  than  in  the 
other,  it  is  manifest  that,  in  their  reciprocal  pay- 
ments, each  will  select  that  species  which  is  valued 
least,  to  pay  to  the  other  where  it  is  valued  most. 
Besides  this,  the  dealers  in  money  will,  from  the 
same  cause,  often  find  a  profitable  traffic  in  an 
exchange  of  the  metals  between  the  two  countries. 
And  hence  it  would  come  to  pass,  if  other  things 
were  equal,  that  the  greatest  part  of  the  gold 
would  be  collected  in  one,  and  the  greatest  part  of 
the  silver  in  the  other.  The  course  of  trade  might 
in  some  degree  counteract  the  tendency  of  the 
difference  in  the  legal  proportions  by  the  market 
value  ;  but  this  is  so  far  and  so  often  influenced  by 
the  legal  rates,  that  it  does  not  prevent  their  pro- 
ducing the  effects  which  is  inferred.  Facts,  too, 
verify  the  inference.  In  Spain  and  England,  where 
gold  is  rated  higher  than  in  other  parts  of  Europe, 
there  is  a  scarcity  of  silver;  while  it  (silver)  is 
found  to  abound  in  France  and  Holland,  where  it 
is  rated  higher  in  proportion  to  gold  than  in  the 
neighboring  nations,  and  it  (silver)  is  continually 
flowing  from  Europe  to  China  and  the  East  Indies 
owing  to  the  comparative  cheapness  of  it  in  the 
former,  and  dearness  of  it  in  the  latter. 

General  utility  will  best  be  promoted  by  a  due 
proportion  of  both  metals.  If  gold  be  most  con- 
venient in  large  payments,  silver  is  best  adapted 
to  the  more  minute  and  ordinary  circulation. 


47 

But  it  is  suspected  that  there  is  another  conse- 
quence, more  serious  than  the  one  which  has  been 
mentioned,  this  is  the  diminution  of  the  total  quan- 
tity of  specie  which  a  country  would  naturally 
possess. 

It  is  evident  that  as  often  as  a  country,  w^hich 
over  rates  either  of  the  metals,  secures  a  payment 
in  that  metal,  it  gets  a  less  actual  quantity  than  it 
ought  to  do,  or  than  it  would  do  if  the  rate  were 
a  just  one. 

It  is  also  equally  evident,  that  there  will  be  a 
continual  effort  to  make  payment  to  it  in  that 
species  to  which  it  has  annexed  an  exaggerated 
estimation,  wherever  it  is  current  at  a  less  pro- 
portional value.  And  it  would  seem  to  be  a  very 
natural  effect  of  these  two  causes,  not  only  that 
the  mass  of  the  precious  metals  in  the  country  in 
question  would  consist  chiefly  of  that  kind  to 
which  it  had  given  an  extraordinary  vahcc,  but 
that  it  would  be  absolutely  less  than  if  they  had 
been  duly  proportioned  to  each  other. 

What  influence  the  proportion  under  consider- 
ation may  have  upon  the  state  of  prices,  and  how 
far  this  ma}'^  counteract  its  tendency  to  increase  or 
lessen  the  quantity  of  the  metals,  are  points  not 
easy  to  be  developed ;  and  yet  they  are  very 
necessary  to  an  accurate  judgment  of  the  true 
operation  of  the  thing. 

But  however  impossible  it  may  be  to  pronounce 
with  certainty,  that  the  possession  of  a  less  quan- 
tity of  specie  is  a  consequence  of  over  valuing 
either  of  the  metals,  there  is  enough  of  probability 


48 

in  the  considerations  which  seem  to  indicate  it, 
to  form  an  argument  of  weight  against  such  over 
valuation. 

A  third  ill  consequence  resulting  from  it  is,  a 
greater  and  more  frequent  disturbance  of  the  state 
of  the  money  unit,  by  a  greater  and  more  frequent 
diversity  between  the  legal  and  market  propor- 
tions of  the  metals.  This  has  not  hitherto  been 
experienced  in  the  United  States,  but  it  has  been 
experienced  elsewhere ;  and  from  its  not  having 
been  felt  by  us  hitherto,  it  does  not  follow  that  this 
will  not  be  the  case  hereafter,  when  our  commerce 
shall  have  attained  a  maturity,  which  will  place 
it  under  the  influence  of  more  fixed  principles. 

In  establishing  a  proportion  between  the  metals, 
there  seems  to  be  an  option  of  one  of  two  things. 

To  approach,  as  nearly  as  it  can  be  ascertained, 
the  mean  or  average  proportion,  in  what  may  be 
called  the  commercial  zvorld ;  or,  to  retain  that  zvhich 
now  exists  in  the  United  States.  As  far  as  these 
happen  to  coincide,  they  will  render  the  course  to 
be  pursued  more  plain  and  more  certain. 

To  ascertain  the  first,  with  precision,  would  re- 
quire better  materials  than  are  possessed,  or  than 
could  be  obtained,  without  an  inconvenient  delay. 

Sir  Isaac  Newton,  in  a  representation  to  the 
Treasury  of  Great  Britain  in  the  year  1717, 
after  stating  the  particular  proportions  in  the  dif- 
ferent countries  of  Europe  concludes  thus  :  "  By 
the  course  of  trade  and  exchange  between  nation 
and  nation,  in  all  Europe,  fine  gold  is  to  fine  silver 
as  i4|,  or  15  to  i," 


49 

But  however  accurate  and  decisive  this  author- 
ity may  be  deemed  in  relation  to  the  period  to 
which  it  applies,  it  cannot  be  taken,  at  a  distance 
of  more  than  seventy  years,  as  a  rule  for  deter- 
mining the  existing  proportions.  Alterations 
have  since  been  made  in  the  regulations  of  their 
coins  by  several  nations ;  which,  as  well  as  the 
course  of  trade,  have  an  infiuence  upon  market 
values.  Nevertheless,  there  is  reason  to  believe, 
that  the  state  of  the  matter,  as  represented  by  Sir 
Isaac  Newton,  is  not  very  remote  from  its  actual 
state. 

In  Holland,  the  greatest  Money  market  of 
Europe,  gold  was  to  silver,  in  December,  1789,  as 
I  to  14.88 ;  and  in  that  of  London  it  has  been,  for 
some  time  past,  but  little  different,  approaching 
perhaps  something  nearer  i  to  15. 

It  has  been  seen  that  the  existing  proportions 
between  the  two  metals  in  this  country  is  about 
I  to  15. 

Tliis  proposition  of  1  to  15  is  recommended  by 
the  particular  situation  of  our  trade,  as  being  very 
nearly  that  zvhich  obtains  in  the  market  of  Great 
Britian ;  to  which  nation  our  specie  is  principally 
exported.  A  loiver  rate  for  either  of  the  metals, 
in  our  market,  than  in  hers,  might  not  only  afford 
a  motive  the  more,  in  certain  cases,  to  remit  in 
specie  rather  than  in  commodities ;  but  it  might, 
in  some  others,  cause  us  to  pay  a  greater  quantity 
of  it  for  a  given  sum  than  we  should  otherzvise 
do.  If  the  effect  should  rather  be  to  occasion  a 
premium  to  be  given  for  the  metal  which   was 


50 

under  rated,  this  would  obviate  these  disadvant- 
ages ;  but  it  would  involve  another,  a  customary 
difference  between  the  market  and  legal  propor- 
tions, which  would  amount  to  a  species  of  disorder 
in  the  national  coinage. 

Looking  forward  to  the  payments  of  interest 
hereafter  to  be  made  to  Holland,  the  same  pro- 
portion does  not  appear  ineligible.  The  present 
legal  proportion  in  the  coins  of  Holland  is  stated 
at  I  to  I4yV  That  of  the  market  varies  some- 
what at  difierent  times,  but  seldom  verj^  widely 
from  this  point. 

There  can  hardly  be  a  better  rule  in  any  country, 
for  the  legal,  than  the  market  proportion,  if  this 
can  be  supposed  to  have  been  produced  by  the 
free  and  steady  course  of  commercial  principles. 
The  presiiniption  in  sucli  case  is,  that  each  metal 
finds  its  true  level,  according  to  its  intrinsic  utility, 
in  the  general  system  of  money  operations. 

But  it  must  be  admitted  that  this  argument  in 
favor  of  continuing  the  existing  proportion  is  not 
applicable  to  the  state  of  the  coins  with  us.  There 
have  been  too  many  artificial  and  heterogeneous 
ingredients — too  much  want  of  order  in  the  pe- 
cuniary transactions  of  this  country — to  authorize 
attributing  the  effects  which  have  appeared  to 
the  regular  operations  of  commerce.  A  proof  of 
this  is  to  be  drawn  from  the  alterations  which 
have  happened  in  the  proportion  between  the 
metals  merely  by  the  successive  degredations  of 
the  dollar,  in  consequence  of  the  mutability  of  a 
foreign  mint.     The  value  of  gold  to  silver  appears 


51 

to  have  declined  wholly  from  this  cause,  from 
I  St(}  to  about  1 5  to  i  ;  yet,  as  this  last  proportion, 
however  produced,  coincides  so  nearly  with  what 
ma)-  be  deemed  the  commercial  average  it  ma}^ 
be  supposed  to  furnish  as  good  a  rule  as  can  be 
pursued. 

The  only  question  seems  to  be,  whether  the 
value  of  gold  ought  not  to  be  a  little  lowered,  to 
bring  it  to  a  more  exact  level  with  the  two  mar- 
kets which  have  been  mentioned ;  but,  as  the 
ratio  of  I  to  15  is  so  nearly  conformable  to  the 
state  of  those  markets,  and  best  agrees  with  that 
of  our  own,  it  will  probably  be  found  the  most 
eligible.  If  the  market  of  Spain  continues  to  give 
a  higher  value  to  gold  (as  it  has  done  in  time  past) 
than  that  which  is  recommended,  there  may  be 
some  advantage  in  a  middle  station. 

Alexander  Hamilton, 
Secretary  of  the   Treasury. 


February  ,  1792. 

I  concur  with  you  in  the  proportion  you  estab- 
lish between  the  value  of  the  two  metals. 

Thomas  Jefferson. 


coinage  law  of  april  2,  1 792. 

Section  ii.    And  be  it  further  enacted, 
that  the  proportional    value    of   gold   to 


52 

SILVER  IN  ALL  COINS  WHICH  SHALL  BY  LAW  BE 
CURRENT  AS  MONEY  WITHIN  THE  UNITED  STATES, 
SHALL  BE  AS  FIFTEEN  TO  ONE,  ACCORDING  TO 
QUANTITY  IN  WEIGHT,  OF  PURE  GOLD  OR  PURE 
SILVER  ;  THAT  IS  TO  SAY,  EVERY  FIFTEEN  POUNDS 
WEIGHT  OF  PURE  SILVER  SHALL  BE  OF  EQUAL  VALUE 
IN  ALL  PAYMENTS,  WITH  ONE  POUND  OF  PURE  GOLD. 
AND  SO  IN  PROPORTION  AS  TO  ANY  GREATER  OR 
LESS  QUANTITIES  OF  THE  RESPECTIVE  METALS. 


VIII.— WEIGHT  OF  COINS. 

January  15,  1782. 

A  dollar  contains  by  the  best  assays  which  I  have 
been  able  to  get,  about  373  grains  of  fine  silver. 

Robert  Morris, 
Superintendent  of  Finance. 


,  1783. 

If  we  determine  that  a  dollar  shall  be  our  unit,  we 
must  then  say  ivith  precision  zvhat  a  dollar  is.  This 
coin  as  struck  at  different  times,  of  different  weights 
and  fineness,  is  of  different  values.  Sir  Isaac  New- 
ton's assay  and  representation  to  the  lords  of  the 
treasury  in  17 17  of  those  which  he  examined  makes 
their  values  as  follows  : 

The  Seville  pieces  of  Eight,      .  .  387    grains  of  pure  silver 

The  Mexico  pieces  of  Eight,     .  .  S^Si       "       "     "         " 

The  Pillar  pieces  of  Eight,         .  .  385^       "       "     " 

The  new  Seville  pieces  of  Eight,  .  3o8j-"jj     "      "     "         " 


53 

The  Financier  states  the  old  dollar  as  containing 
T^J^  grains  of  fine  silver  and  the  new  365  grains. 
If  the  dollar  circulating  among  us  be  of  every 
date  equally,  we  should  examine  the  quantity  of 
pure  metal  in  each  and  from  them  form  an  average 
unit.  This  is  a  work  proper  to  be  committed  to 
mathematicians  as  well  as  merchants,  and  which 
should  be  decided  on  actual  and  accurate  experi- 
ment. 

Should  the  unit  be  fixed  at  365  grains  of  pure 
silver,  gold  at  15  for  i,  and  the  alloy  of  both  to  be 
one-twelfth  the  weight  of  the  coins  will  be  as 
follows : 


Character  of  Coins. 

Denomi- 
national 
Value. 

Grains 

Pure 

Metal. 

Grains 

Alloy. 

Weight. 
Dwt.     Grs. 

The  gold  piece  containing 

$10.00 

243i 

22.12 

II 

•  145 

The  unit  or  dollar   .     .     . 

1. 00 

365 

36.IS 

16 

14.1S 

The  half  dollar  or  5-tenths 

•50 

l82i 

16.59 

8 

7.09 

The  fifth  or  pistareen  .     . 

.20 

73 

6.63 

3 

7-63 

The  tenth  or  bit     .     .     , 

.10 

36A 

3.31!? 

I 

15.818 

The  twentieth  or  half  bit 

•115 

i8i 

1,659 

19.9 

Suppose  then  the  Committee  of  States  be  in- 
structed to  prepare  an  ordinance,  that  the  money 
unit  of  these  United  States  shall  be  equal  in  value  to  a 
Spanish  milled  dollar  containing  so  much  Jine  silver 
as  the  assay  before  directed  shall  show  to  be  contained 
on  an  average  in  dollars  of  the  several  dates  circulat- 
ing with  us. 

Thomas  Jefferson. 


May  13,  1785. 

When  it  is  considered  that  the  Spaniards  have 
been  reducing  the  weight  of  their  Dlrs  and  that 


S4 

instead  of  385,  the  grains  of  pure  silver  in  the  old 
Mexico  dollar,  the  new  dollars  have  not  more  than 
365  grains,  it  will  hardly  be  thought  that  362 
grains  of  pure  silver  is  too  little  for  the  federal 
coin  which  is  to  pass  current  in  all  pa^'ments  for 
one  dollar. — Report  of  a  Grand  Committee  on  the 
Money  Unit. 


April  8,  1786. 

Coinage  system  proposed  to  Congress  by  the 
Board  of  Treasury.  The  report  was  in  triplicate, 
and  contained  three  distinct  schemes,  each  of 
which  was  set  forth  with  great  particularity.  The 
proposals  were  as  follows  : 

Report  No.  i  Silver  Dollars,     .         .         .         375-64      grains  fine. 

350.09  grains  fine. 
521.73      grains  fine. 

24.6268  grains  fine. 

23-79      grains  fine. 

34.782    grains  fine. 

Samuel  Osgood, 
Walter  Livingston. 


Report  No.  2  Silver  Dollars,     . 
Report  No.  3  Silver  Dollars, 
Report  No.  i  Gold  Pieces  per  Dollar, 
Report  No.  2  Gold  Pieces  per  Dollar, 
Report  No.  3  Gold  Pieces  per  Dollar, 


Tuesday,  August  8,  1786. 

Resolved,  That  the  money  nnit  of  the  United 
States,  being  by  the  resolve  of  Congress  of  the  6th  of 
July,  1785,  a  dollar,  shall  contain  of  fine  silver  375yV"D'' 
grains. 

That  betwixt  the  dollar  and  the  copper  coin,  as 
fixed   by  the   resolve  of   Congress  of  the   6th   of 


55 

July,  1785,  there  shall  be  three  silver  coins.  One 
containing  i^7Yu\  gr^-i^s  of  fine  silver  to  be  called 
a  half  dollar. 

One  containing  ySj'u'o'o'  grains  of  fine  silver,  to 
be  called  a  double  disme. 

And  one  containing  37t^Vo  grains  of  fine  silver, 
to  be  called  a  disme. 

And  there  shall  be  two  gold  coins : 

One  containing  246^2.^^^^^  grains  of  fine  gold, 
equal  to  10  dollars,  and  to  be  stamped  with  the 
impression  of  the  American  Eagle,  and  to  be  called 
an  Eagle. 

One  containing  i23jL3(y^^  grains  of  fine  gold, 
equal  to  5  dollars,  be  stamped  in  like  manner,  and 
to  be  called  a  half  eagle. — Resolution  of  Coinage. 


April  28,  1791. 

According  to  the  authority  on  which  the  Secre- 
tary places  reliance,  the  standard  of  Spain  for  its 
silver  coin  in  the  year  1761  was  377  grains  of  fine 
silver.  But  there  is  no  question  that  this  standard 
has  been  since  altered  considerably  for  the  worse  : 
what  precise  point,  it  is  not  as  well  ascertained  as 
could  be  wished  ;  but,  from  a  computation  of  the 
value  of  dollars  in  the  markets  both  of  Amster- 
dam and  London  (a  criterion  which  cannot  mate- 
rially mislead)  the  new  dollar  appears  to  contain 
about  368  grains  of  fine  silver,  and  that  which 
immediately  preceded  it  about  374  grains.  In 
this  state  of  things,  there  is  some  difficulty  in  de- 


56 

fining  the  dollar,  which  is  to  be  understood  as 
constituting  the  present  money  unit,  on  the  sup- 
position of  its  being  more  applicable  to  that 
species  of  coin. 

The  sum  in  the  money  of  account  of  each  state, 
corresponding  with  the  nominal  value  of  the  dol- 
lar in  each  state,  corresponds  also  with  24  grains 
and  f  of  a  grain  of  fine  gold  ;  and  with  something 
between  368  and  374  grains  of  fine  silver. 

TJie  conclusion  to  be  drarou  from  the  observations 
which  have  been  made  on  the  subject  is  this :  That 
the  unit,  in  the  coins  of  the  United  States,  ought  to 
correspond  zvith  ^Jf.  grains  and  \  of  a  grain  of  pure 
gold,  and  with  371  grains  and  \  of  a  grain  of  pure 
silver,  each  answering  to  a  dollar  in  money  of  account. 
Alexander  Hamilton, 
Secretary  of  the  Treasury. 


February  — — ,  1792. 

Should  it  be  thought  that  Congress  may  reduce 
the  value  of  the  dollar,  /  shoidd  be  for  adopting 
for  our  unit,  instead  of  the  dollar,  either  one  ounce  of 
pure  silver,  or  one  ounce  of  standard  silver,  so  as  to 
keep  the  unit  of  money  a  part  of  the  system  of  meas- 
ures, tveights  and  coins. 

Thomas  Jefferson. 


coinage  law  of  april  2,  i  792. 
Section  9.    And    be    it  further  enacted, 
that  there  shall    be    from    time    to    time 


57 

struck  and  coined  at  the  said  mint,  coins  of 
gold,  silver  and  copper,  of  the  following 
denominations,  values  and  descriptions,  viz  : 
Eagles — each  to  be  of  the  value  of  ten  dol- 
lars OR  UNIT,  AND  TO  CONTAIN  TWO  HUNDRED 
AND  FORTY-SEVEN  GRAINS  AND  FOUR-EIGHTHS  OF  A 
GRAIN  OF  PURE,  OR  TWO  HUNDRED  AND  SEVENTY 
GRAINS  OF  STANDARD  GOLD.  HaLF  EaGLES — EACH 
TO  BE  OF. THE  VALUE  OF  FIVE  DOLLARS,  AND 
TO  CONTAIN  ONE  HUNDRED  AND  TWENTY-THREE 
GRAINS  AND  SIX-EIGHTHS  OF  A  GRAIN  OF  PURE,  OR 
ONE  HUNDRED  AND  THIRTY-FIVE  GRAINS  OF  STAND- 
ARD GOLD.    Quarter  Eagles — each  to  be   of 

THE  value  of  two  DOLLARS  AND  A  HALF  DOLLAR, 
AND  TO  CONTAIN  SIXTY-ONE  GRAINS  AND  SEVEN- 
EIGHTHS  OF  A  GRAIN  OF  PURE,  OR  SIXTY-SEVEN 
GRAINS  AND  FOUR-EIGHTHS  OF  A  GRAIN  OF  STAND- 
ARD  GOLD.      Dollars   or    units — each   to   be 

OF  THE  VALUE  OF  A  SPANISH  MILLED  DOLLAR  AS 
THE  SAME  IS  NOW  CURRENT,  AND  TO  CONTAIN 
THREE  HUNDRED  AND  SEVENTY-ONE  GRAINS  AND 
FOUR-SIXTEENTH  PARTS  OF  A  GRAIN  OF  PURE,  OR 
FOUR  HUNDRED  AND  SIXTEEN  GRAINS  OF  STANDARD 

SILVER.    Half  Dollars— each  to  be  of  half 

THE  VALUE  OF  THE  DOLLAR  OR  UNIT,  AND  TO 
CONTAIN  ONE  HUNDRED  AND  EIGHTY-FIVE  GRAINS 
AND  TEN-SIXTEENTH  PARTS  OF  A  GRAIN  OF  PURE, 
OR  TWO  HUNDRED  AND  EIGHT  GRAINS  OF  STANDARD 

SILVER.      Quarter   Dollars — each    to  be  of 

ONE-FOURTH  THE  VALUE  OF  THE  DOLLAR  OR  UNIT, 
AND  TO  CONTAIN  NINETY-TWO  GRAINS  AND  THIR- 
TEEN-SIXTEENTH  PARTS   OF  A   GRAIN   OF   PURE,  OR 


58 


ONE  HUNDRED  AND  FOUR  GRAINS  OF  STANDARD 
SILVER.  DiSMES— EACH  TO  BE  OF  THE  VALUE  OF 
ONE-TENTH  OF  A  DOLLAR  OR  UNIT,  AND  TO  CON- 
TAIN THIRTY-SEVEN  GRAINS  AND  TWO-SIXTEENTH 
PARTS  OF  A  GRAIN  OF  PURE,  OR  FORTY-ONE  GRAINS 
AND  THREE-FIFTH   PARTS  OF  A  GRAIN  OF  STAND  A.RD 

SILVER.      Half  Dismes — each  to  be    of    the 

VALUE  OF  ONE-TWENTIETH  OF  A  DOLLAR,  AND  TO 
CONTAIN  EIGHTEEN  GRAINS  AND  NINE-SIXTEENTH 
PARTS  OF  A  GRAIN  OF  PURE  OR  TWENTY  GRAINS 
AND  FOUR-FIFTH  PARTS  OF  A  GRAIN  OF  STANDARD 
SILVER. 


IX.— DEBASEMENT    OF   COINS. 

January  15,  1782. 

Both  gold  and  silver  coins  are  indeed  prefer- 
able in  one  respect  to  common  Bullion,  that  the 
standard  is  presumed  to  be  just,  and  consequently 
they  are  received  without  the  delays  and  expense 
of  assaying.  It  must  however  be  remembered, 
that  they  are  foreign  coins,  and  of  course  we  are 
not  only  exposed  to  the  tricks  of  individuals  but 
should  it  suit  the  interest  or  convenience  of  any 
Sovereign  to  make  base  money  for  us,  there  is 
nothing  to  prevent  it.  If  for  instance,  the  King 
of  England,  or  any  of  his  Birmingham  Artists, 
should  coin  guineas  worth  but  sixteen  shillings 
sterling  our  citizens  would  readily  and  freely  re- 
ceive them  at  twenty-one  shillings  sterling. 

It  is  my  duty  to  mention  to  Congress  informa- 


59 

tion  I  have  received,  that  Guineas  of  base  metal 
are  coined  in  Birmin^^ham  so  well  as  to  escape 
any  common  attention. 

If  a  greater  alloy  should  be  introduced  by  the 
Spanish  Government  into  their  dollars  our  in- 
terior regulations  as  to  money  wf^uld  be  over- 
turned, and  certainly  we  have  no  security  that 
this  will  not  happen. 

It  is  possible  that  the  new  money  will  at  first  be 
received  with  diffidence  by  some,  yet  zvJien  it  has 
been  fairly  assayed  it  will  gain  full  confidence 
from  all. 

Robert  Morris, 
Superintendent  of  Finance. 


.... ,   1783. 

The  Legislatures  should  co-operate  with  Con- 
gress in  providing  that  no  money  be  received  or 
paid  at  their  treasuries,  or  by  any  of  their  officers, 
or  any  bank  hut  on  actual  zveigJit ;  in  making  it 
criminal  in  a  high  degree  to  diminish  their  own 
coins,  and  in  some  smaller  degree  to  offer  them  in 
j)ayment  when  diminished. 

Thomas  Jep^ferson. 


iMav   13,  17S5. 

There  are  no  materials  from  which  we  can  esti- 
mate  the  weight   of   half  pence   that    have   been 


6o 

imported  from  Britain  since  the  late  war,  but  we 
have  heard  of  sundry  shipments  being  ordered, 
to  the  nominal  amount  of  i,ooo  guineas,  and  we 
are  told  that  no  Packet  arrives  from  England  by 
which  we  are  not  accommodated  with  some  hun- 
dred weight  of  base  half  pence.  It  is  a  very 
moderate  computation  which  stated  our  loss  on 
the  last  twelve  months  at  thirty  thousand  dollars 
by  the  commerce  of  vile  coin. — Report  of  a  Grand 
Couiijiittcc  on  till    Money   Unit. 


April  28,  1791. 

The  dollar  originally  contemplated  in  the  money 
transactions  of  this  country,  by  successive  diminu- 
tions of  its  weight  and  fineness,  has  sustained  a 
depreciation  of  five  per  cent.;  and  yet  the  new 
dollar  has  a  currency,  in  all  payments  in  place  of 
the  old,  with  scarcely  any  attention  to  the  differ- 
ence between  them.  The  operation  of  this  in 
depreciating  the  value  of  property  depending 
upon  past  contracts,  and  (as  far  as  inattention  to 
the  Alteration  in  the  coin  may  be  supposed  to 
leave  prices  stationary)  of  all  other  property  is 
apparent.  Nor  can  it  require  argument  to  prove 
that  a  nation  ought  not  to  suffer  the  value  of  the 
property  of  its  citizens  to  fluctuate  with  the  fluc- 
tuations of  a  foreign  mint,  and  to  change  with  the 
changes  in  its  regulations  of  a  foreign  Sovereign. 

The  unequal  values  allowed,  in  different  parts 
of  the  Union,  to  coins  of  the  same  intrinsic  worth  ; 
the  defective  species  of  them  which  embarrass  the 


6i 

circulation  of  some  of  the  States ;  and  the  dis- 
similaritv  in  their  several  moneys  of  account,  are 
inconveniences  which,  if  not  to  be  ascribed  to  the 
want  of  a  national  coinage,  will  at  least  be  most 
effectually  remedied  by  the  establishment  oi  one, 
a  measure  that  will,  at  the  same  time,  ij^ive  ad- 
ditional security  against  impositions  by  counter 
feit  as  well  as  b}'  base  currencies. 

To  declare  that  a  less  weight  of  gold  or  silvei 
shall  pass  for  the  same  sum,  which  before  repre- 
sented a  greater  weight  ;  or  to  ordain  that  the 
same  weight  shall  pass  for  a  greater  sum,  are 
things  substantially  of  one  nature.  The  conse- 
quence of  either  of  them,  if  the  change  can  be 
realized,  is  to  degrade  the  money  unit ;  obliging 
creditors  to  receive  less  than  their  just  dues  ;  and 
depreciating  property  of  every  kind  ;  for  it  is 
manifest  that  everything  would,  in  this  case,  be 
represented  bv  a  less  quantitv  of  gohl  and  silver 
than  before. 

I3ut  the  quantity  of  gold  and  silver  m  the 
national  coins,  corresponding  with  a  given  sum, 
cannot  be  made  less  than  heretofore  without  dis- 
turbing the  balance  of  intrinsic  value,  and  mak- 
ing every  acre  of  land,  as  well  as  evei'y  bushel  of 
wheat,  of  less  actual  worth  than  in  time  past,  if 
the  United  States  were  isolated  and  cut  off  from 
all  intercourse  with  the  rest  of  mankind,  this 
reasoning  would  not  be  equally  conclusive.  But 
it  appears  decisive,  when  considered  with  a  view 
to  the  relations  which  commerce  has  created 
between  us  and  other  countries. 


62 


A  general  revolution  in  prices,  though  only  nomi- 
nal, and  in  appearance,  could  not  fail  to  distract  the 
ideas  of  the  Community;  and  zvould  be  apt  to  breed 
disco)ite?its  as  zvell  among  those  wJio  live  on  the  income 
of  their  money,  as  among  the  poorer  classes  of  the  peo- 
ple, to  zvJiom  the  necessaries  of  life  would  seem  to  have 
hecome  dearer.  A  niong  the  evils  attendant  on  such  a 
operation,  are  these:  creditors  both  of  the  public  and  of 
individuals,  zvould  lose  a  part  of  their  property;  public 
and  private  credit  zvould  receive  a  zvoiDui;  the  effective 
revenues  of  the  government  zvould  be  diminished. 
There  is  scarcely  any  point  in  the  economy  of  national 
affairs,  of  greater  moment  than  the  uniform  preserva- 
tion of  the  intrinsic  value  of  the  money  unit.  On  this 
the  security  and  steady  value  of  property  essentially 
depend. 

It  must  be  not  a  little  difficidt  to  keep  the  money  of 
the  zvorld,  zvhich  can  be  employed  to  an  equal  p^irpose 
in  the  commerce  of  the  zvorld,  in  a  state  of  degrada- 
tion, in  comparison  zvith  the  money  of  a  particular 
country. 

Alexander  Hamilton, 

Secretary  of  the  Treasury. 


coinage  law  of  april  2,  1 792. 

Section  19.  And  be  it  further  enacted, 
that  if  any  of  the  gold  or  silver  coins  which 
shall  be  struck  or  coined  at  the  said  mint 
shall  be  debased  or  made  worse  as  to  the 
proportion  of  fine  gold  or  fine  silver  therein 


63 

CONTAINED,  OR  SIIAI,L  BE  OF  LESS  WEIGHT  OR 
VALUE  THAN  THE  SAME  OUGHT  TO  BE  PURSUANT 
TO  THE  DIRECTIONS  OF  THIS  ACT,  THROUGH  THE 
DEFAULT  OR  WITH  THE  CONNIVANCE  OF  ANY 
OF  THE  OFFICERS  OR  PERSONS  WHO  SHALL  BE 
EMPLOYED  AT  THE  SAID  MiNT,  FOR  THE  PURPOSE 
OF  PROFIT  OR  GAIN,  OR  OTHERWISE  WITH  A  FRAUD- 
ULENT INTENT,  AND  IF  ANY  OF  THE  SAID  OFFICERS 
OR  PERSONS  SHALL  EMBEZZLE  ANY  OF  THE  METALS 
WHICH  SHALL  AT  ANY  TIME  BE  COMMITTED  TO 
THEIR  CHARGE  FOR  THE  PURPOSE  OF  BEING  COINED, 
OR  ANY  OF  THE  COINS  WHICH  SHALL  BE  STRUCK 
OR  COINED,  OR  ANY  OF  THE  COINS  WHICH  SHALL  BE 
STRUCK  OR  COINED  AT  THE  SAID  MiNT,  EVERY  SUCH 
OFFICER  OR  PERSON  WHO  SHALL  COMMIT  ANY  OR 
EITHER  OF  THE  SAID  OFFENSES,  SHALL  BE  DEEMED 
GUILTY  OF  FELONY,  AND  SHALL  SUFFER  DEATH. 


X.— LEGAL  TENDER  POWER. 

23d  year  of  his  late  Majesty,  King  George  the 
Second. 

//  is  enacted  in  the  Words  folloiving,  viz  :  That 
all  Bargains,  and  Contracts,  Debts  and  Dues 
whatsoever  shall  be  agreed,  contracted  or  made 
after  the  thirty-first  Day  of  March,  1750,  shall  be 
understood,  and  are  hereby  declared  to  be  in 
Silver  at  six  shillings  and  eiglit  pence  per  ounce, 
and  all  Spanish  Mill'd  Pieces  of  Eight  of  full 
weight  shall  be  accounted,  taken  and  paid  at  the 
Rate  of  Six  Shillings  per    Piece  for  the  discharge 


64 

of  any  Contracts  or  Bargains  to  be  made  after  the 
said  thirty-first  Day  of  March,  1750,  the  Halves, 
Quarters,  and  other  less  Pieces  of  the  same  Coin 
to  be  accounted,  received,  taken  or  paid  in  the 
same  Proportion. 

Be  it  therefore  enacted,  that  it  shall  not  be 
lawful  for  any  person  to  receive,  take  or  pay  an}' 
of  the  following  Coins  at  any  greater  or  higher 
rate  than  is  allowed  b}'  this  Act,  viz  :  A  Guinea 
at  twenty-eight  Shillings  ;  an  English  Crown  at 
Six  Shillinps  and  Ei^Jit  Poicc.  an  half  Crown  at 
tJiree  SJiillings  and  fori?'  Pence  ;  an  English  Shilling 
at  one  shilling  and  four  Pence  ;  an  English  six  Pence 
at  Eight  Pence  ;  A  double  Johannes,  or  Gold  Coin 
of  Portugal  of  the  value  of  three  Pounds  twelve 
Shillings  sterling,  at  four  Pounds  sixteen  Sliillings  ; 
a  single  Johannes  of  the  value  of  Thirty-six  Shill- 
ings Sterling,  at  Forty-eight  Shillings;  A  Moidore 
at  Thirty-six  Shillings  ;  a  pistole  of  full  weight  at 
twenty-two  Shillings ;  three  English  farthings  for 
One  Penny  ;  an  English  Half  Pence  in  greater  or 
less  numbers  in  proportion. 

Providing  always,  and  it  is  hereby  declared, 
That  nothing  in  this  Act  shall  be  understood  t(^ 
restrain  any  Person  or  Persons  from  accounting, 
receiving,  taking  or  paying  any  of  the  above 
mentioned  Species  or  Coins  in  discharge  of  any 
Debts,  Contracts  or  Bargains  made  before  the 
thirty-first  Day  o\  March,  One  Thousand  and  Seven 
Hundred  and  Fifty,  at  the  following  Rates,  viz : 
For  any  Debt  contracted  ))efore  the  said  thirty- 
first  Day  of  March,  and  understood  to  be  payable 


65 

in  Bills  of  the  Old  Tenor  in  such  proportion 
higher  or  greater  than  the  Rates  set  in  this  Act, 
as  Forty-five  Shillings  is  to  .sv'.r  Shillings ;  and  for 
any  Debt  contracted  before  the  said  thirty-first 
day  of  Miirch,  and  understood  to  be  payable  in 
Bills  of  the  middle  Tenor  or  Bills  of  the  new 
Tenor,  in  such  proportion  higher  or  greater  than 
the  Rates  set  at  in  this  Act  as  Eleven  Shillings  a7id 
three  Pence  is  to  .S7,v  Shillings ;  any  thing  in  this 
Act  to  the  contrary  notwithstanding. 

Acts  and  laws  of  his  Majesty's   Province  of  the 
Massachusetts  Bay  in  New  England. 


January  15,  1782. 
The  advantage  of  possessing  legal  Money  in 
preference  to  any  other,  would  induce  people  to 
carry  foreign  Coins  to  the  Mint  until  a  sufficiency 
were  struck  for  the  circulating  medium,  and  the 
advantage  of  holding  the  only  Money  which  can 
pay  debts  or  discharge  Taxes,  will  soon  give  it 
(the  New  Coinage)  the  preference  over  all,  and 
indeed  banish  all  other  from  Circulation. 

Robert  Morris, 
Superintendent  of  Finance^ 


x\PRIL   28.    I  79 1. 

The  actual  dollar   at   the    time   of  contracting,   is 

the   only  one    which    can    be   supposed  to    have  been 

intended ;  and  it  has  been  seen  that,  as    long  ago 

as  the  year  1761,  there  had  been  a  material  deg- 


66 

redation  of  the  standard.  A  recurrence  to  the 
ancient  dollar,  would  be  in  the  greatest  number 
of  cases  an  innovation  in  fact,  and,  in  all,  an  inno- 
vation in  respect  to  opinion.  The  actual  dollar 
in  common  circulation  has  evidently  a  much  bet- 
ter claim  to  be  regarded  as  the  actual  money  unit. 

And  it  is  not  explained  whether  either  of  the 
two  species  of  coins,  of  gold  or  silver,  shall  have 
an}?-  greater  legality  in  payments  than  the  other. 
Yet  it  would  seem  that  a  preference  in  this  par- 
ticular is  necessary  to  execute  the  idea  of  attach- 
ing the  unit  exclusively  to  one  kind.  If  -each  ot 
them  be  as  valid  as  the  other  in  payments  to  any 
amount,  it  is  not  obvious  in  what  effectual  sense 
either  of  them  can  be  deemed  the  money  unit, 
rather  than  the  other. 

Upon  the  supposition  that  the  expense  of  coin- 
age ought  to  be  defrayed  out  of  the  metals,  there 
are  two  ways  in  tuliicJi  it  may  be  effected ;  one, 
by  the  reduction  of  the  quantity  of  fine  gold  and 
silver  in  the  coins;  the  other  by  establishing  a 
difference  betzveen  the  value  of  those  metals  in 
the  Coins,  and  the  Mint  price  of  them  in  bullion. 
The  consequence  of  either  of  them,  if  the  change 
can  be  realized,  is  to  degrade  the  money  unit ; 
obliging  creditors  to  receive  less  than  their  just 
dues,  and  depreciating  property  of  every  kind  ;  for  it 
is  manifest  that  everything  zvould  in  that  case,  be 
represented  by  a  less  quantity  of  gold  and  silver 
than  before. 

Alexander  Hamilton, 

Secretary  of  the  Treasury. 


February ,  1792. 

With  respect  to  the  dollar,  it  must  be  admitted 
by  all  the  world,  that  there  is  great  incertainty  in 
the  meaning  of  the  term,  and  therefore  all  the 
world  will  have  justified  Congress  for  their  first 
act  of  removing  the  incertainty  by  declaring  what 
they  understand  by  the  term  (resolution  on  Coin- 
age of  August  8,  1786),  but  the  incertainty  once 
removed  exists  no  longer,  and  /  very  much  doubt 
a  right  noiv  to  change  the  value  and  especially  to 
lessen  it.  It  would  lead  to  so  easy  a  mode  of  paying 
off  their  debts.  Besides,  the  parties  injured  by 
this  reduction  of  the  value  would  have  so 
much  matter  to  urge  in  support  of  the  first 
point  of  fixation.  Should  it  be  thought,  however, 
that  Congress  may  reduce  the  value  of  the  dollar, 
I  should  be  for  adopting  for  our  unit,  instead  of 
the  dollar,  either  one  ounce  of  pure  silver  or  one 
ounce  of  standard  silver,  so  as  to  keep  the  unit  of 
money  a  part  of  the  S3'stem  of  measure,  weights 
and  coins. 

Thomas  Jefferson. 


coinage  law  of  april  2,  1792. 
Section  i6.    And   be  it  further  enacted, 

THAT  all  the  GOLD  AND  SILVER  COINS  WHICH 
HAVE  BEEN  STRUCK  AT,  AND  ISSUED  FROM  THE 
SAID  MINT,  SHALL  BE  A  LAWFUL  TENDER  IN  ALL 
PAYMENTS  WHATSOEVER,  THOSE  OF  FULL  WEIGHT 
ACCORDING   TO    THE    RESPECTIVE    VALUES  HEREIN- 


68 


BEFORE  DECLARED,  AND  THOSE  OF  LESS  THAN  FULL 
WEIGHT  AT  VALUES  PROPORTIONED  TO  THEIR 
RESPECTIVE  WEIGHTS. 


;.  THE  PEOPLE  HAVE  NOT   BEEN  COR- 
RECTLY TAUGHT. 

The  fact  that  at  the  present  time  (1896)  a  serious 
contention  is  being  urged  as  to  the  standard 
of  value,  as  though  the  principles  of  sound 
money  were  not  hxed  in  the  Coinage  Law  of  1792, 
but  were  left  by  the  Fathers  of  the  Nation  to  be 
the  foot  ball  of  party  politics,  is  evidence  that  the 
people  have  not  been  correctly  taught  and  do  not 
know  what  "  the  Money  of  the  Constitution " 
authorized  by  that  law  really  was.  It  is  evidence 
that  the  majority  of  the  people  have  thought  the 
subject  too  difficult  for  them  to  master  without 
much  study,  and  ha\  e  intrusted  it  to  those  who 
shape  political  policies  and  write  political  plat- 
forms. It  is  evidence  that  some  who  have  com- 
mercial interests  or  political  ambitions  to  serve, 
have  corrupted  the  minds  of  the  people  with 
fallacies  and  sophistries  until  many  believe,  in 
demanding  at  the  present  time  the  free  coinage  of 
silver  at  the  ratio  of  16  to  i,  they  are  demanding 
"  the  Money  of  the  Constitution  "  of  which  they 
are  told  they  have  been  deprived  by  surreptitious 
and  unfair  means.  Those  making  this  demand 
may  be  divided  into  two  classes,  the  honest  minded 
who  are  not  correctly  informed,  and  the  dishonest. 


09 

The  first  need  correct  instruction,  the  second 
must  be  shown,  so  well  did  the  Fathers  of  the 
Republic  write  the  principles  of  sound  money 
into  the  firs!  Coinage  law  that  there  is  absolutely 
no  chance  for  them  to  become  gainers  bv  the  dis- 
honesty they  would  practice.  Show  the  one  that 
the  free  coinage  of  silver  under  the  present  con- 
ditions at  the  ratio  of  i6  to  i,  would  not  provide 
them  with  the  money  authorized  by  the  Coinage 
Law  of  1792,  and  that  it  is  unmistakably  forbidden 
by  the  terms  of  that  law  ;  take  from  the  other  all 
hope  of  making  an  unjust  gain  by  such  an  enact- 
ment, and  all  desire  for  such  a  law  will  disappear. 


<y.  FOR  THE  HONEST  >nNDED  WHO  ARE 
NOT  CORRECTLY  INFORMED. 

The  power  delegated  to  Congress  to  "  coin 
money  and  regulate  the  value  thereof "  does  not 
require  the  use  of  any  specified  metal  or  com- 
modity for  that  purpose,  it  does  not  require  the 
coinage  of  money  in  any  specified  denominations 
or  amounts.  Gold  and  silver  became  the  money 
metals  of  the  country  by  commercial  usage  and 
the  fact  that  by  the  terms  of  the  Constitution  no 
state  can  enact  a  law  "  making  anything  but  gold 
and  silver  a  tender  in  payments  of  debts,"  but  it 
does  not  say  that  payment  shall  be  made  in  gold 
or  silver  coins. 

Congress  has  constitutional  power  to  coin 
money  from  either  metal,  in  any  denominations  it 


70 

may  elect,  and  to  make  such  coins  an  unlimited, 
or  a  limited  legal  tender  as  it  may  deem  to  be  best 
calculated  to  promote  the  public  welfare.  Such 
action  has  been  taken  b)^  all  governments  at 
different  times,  and  has  been  taken  by  this  govern- 
ment without  its  authority  to  do  so  being 
questioned. 

The  fact  that  a  law,  which  is  simply  an  act  of 
Congress  and  therefore  subject  to  repeal,  may 
acquire  all  the  force  of  a  Constitutional  provision 
and  thus  be  placed  beyond  the  power  of  Congress 
to  change  it  is  shown  by  the  provision  in  the  Act 
of  April  2,  1792,  establishing  the  decimal  system 
of  Money  Arithmetic.  At  that  time  many  people 
were  using  the  English  system  of  pounds,  shillings 
and  pence,  and  there  were  no  coins  in  circulation 
corresponding  with  the  money  of  account  then 
adopted.  This  enactment  however  has  proven  so 
helpful  and  satisfactory  in  every  way  and  its  terms 
have  become  so  incorporated  into  the  language, 
ideas  and  customs  of  the  people  that  no  suggestion 
has  ever  been  made  to  change  it.  To  secure  an 
act  of  Congress  now,  changing  the  system  of  the 
Money  of  Account  of  the  United  States,  would  be 
far  more  difficult  than  to  secure  changes  in  the 
Constitution. 

The  system  of  Money  Arithmetic  is  so  v.'^ell 
settled,  it  is  no  longer  considered  a  subject  of  dis- 
cussion. There  is  no  good  reason  why  the  ques- 
tion of  the  Monetar)^  System  of  the  United  States 
should  not  be  as  definitely  and  as  satisfactorily 
settled,  based  upon  an  established  unit  of  value. 


71 

I.— FALLACY  No.  1.     UNCHANGEABLE 
UNIT  OF   VALUE. 

One  of  the  fallacies  persistently  taught  by  the 
advocates  of  free  silver  coinage  is,  because  the 
Coinage  Act  of  April  2,  1792,  made  one  dollar  the 
unit  of  coinage  and  provided  that  it  should  be 
measured  by  371%  grains  of  pure  silver,  that  this 
quantity  of  silver  became  an  unchangeable  unit 
of  value.  An  examination  of  what  the  Fathers  of 
the  Republic  said  about  the  monetary  unit  will 
show  that  the}^  recorded  many  changes  that 
had  been  made  in  the  weight  of  the  "dollars" 
coined  by  other  governments  ;  that  in  attempting 
to  establish  a  coinage  they  suggested  several  dif- 
ferent weights  for  the  dollar  they  were  to  coin  ; 
that  by  resolution  of  August  8,  1786,  they  de- 
clared that  "the  dollar  should  contain  375jW 
grains  of  fine  silver,"  and  by  act  of  April  2,  1792, 
"provided  that  it  should  contain  371%^  grains  of 
line  silver."  This  proves  beyond  the  possibility 
of  a  doubt  that  the  theory  that  the  contents  of 
the  unit  of  coinage  could  never  be  changed  when 
once  established,  was  unknown  to  those  who 
framed  and  adopted  the  Constitution  and  enacted 
the  Coinage  Law  of  1792.  As  if  to  place  such  a 
thing  beyond  the  limits  of  rational  argument,  in 
his  Report  on  the  Establishment  of  a  Mint,  Alex- 
ander Hamilton,  Washington's  Secretary  of  the 
Treasury,  said,  speaking  of  the  policy  of  reducing 
one  of  the  metals  "  to  the  situation  of  a  mere  mer- 
chandise," that  it  "  would   probably  be  a  greater 


72 

evil  than  oceasional  variations  in  the  unit,  from 
the    fluctuations    in    the    relative    value    of    the 
metals  ;  especially  if  care  be  taken  to  regulate  the 
proportion   between  thou,  with  an   eye  to  their 
average  commercial  value."    And  again,  in  speak- 
ing of  the  proportion  between  gold  and  silver  re- 
ported   bv^  Sir    Isaac  Newton    in    1717,   he  said: 
"  But  however  accurate  and  decisive  this  author- 
ity may  be  deemed,  m    relation  to  the  period  to 
which   it  applies,   it  cannot  be  taken,  at  the  dis- 
tance of  more  than  seventy  years,  as  a  rule  for 
determinmg  the  existing  proportion."     In  view  of 
these   lacts  can  there  be  a  more  unreasonable  or 
absurd  claim  than  that  the  weight  of  the  unit  coin 
and  the  proportion  fixed  between  gold  and  silver 
by  the  Coinage   Law  of   1792  is  unchangeable  to 
the  end    of   time  ?     Shall    we    not    rather   repeat 
Hamilton's  words  and  say  "•  but  however  accur- 
ate and   decisive    this  authority  may  be  deemed 
[the  Coinage  Law  of   1792],  in  relation  to  the  pe- 
riod to  which  it  applies,  it  cannot  be  taken,  at  the 
distance  of  more  than  one  hundred  years,  as  a  rule 
for  determining  the  existing  proportions." 

The  power  to  regulate  the  value  of  coins  can 
be  exercised  only  by  making  changes  in  their 
weight,  the  "occasional  variations  in  the  unit" 
that  Hamilton  mentioned  as  a  means  of  correct- 
ing "  fluctuations  in  the  relative  value  of  the 
metals."  If  a  unit  of  coinage  once  fixed  can  never 
thereafter  be  changed,  the  Congress  that  enacted 
the  first  coinage  law  deprived  that  body  for  all 
time  of  the  right  to  subsequently  exercise'a  power 


73 

which    the    Constitution    definitely    says   it   shall 
have ;  the  power  to  regulate  the  value  of  coins. 

The  claim  that  the  unit  of  Coinage  is  unchange- 
able is  not  consistent  with  the  opinions  and  acts 
of  those  who  formed  and  adopted  the  Constitu- 
tion nor  with  the  provisions  of  the  Constitution. 


II.— FALLACY    No.    2.      DOUBLE    STAND- 
ARD   OF   VALUE. 

More  effort  has  been  spent  to  teach  the  people 
that  the  Constitution  requires  both  gold  and  sil- 
ver to  be  used  as  a  standard  of  value,  than  has 
been  given  to  any  other  one  point.  Arguments 
to  prove  that  the  selection  of  "  (jne  dollar''  as  the 
unit  of  coinage  and  the  coining  of  a  silvei'  dollar, 
made  a  silver  dollar  the  "  unit  of  value  "  ;  and  ar- 
guments to  prove  that  gold  and  silver  were  both 
constitutional  standards  of  value,  have  done  more 
to  prevent  a  clear  understanding  of  monetary 
questions  than  any  other  cause. 

Robert  Morris  clearly  stated  that  but  one  metal 
could  be  used  as  a  standard  of  value,  gave  his 
preference  to  silver  although  stating  that  it  would 
not  be  a  stable  measure  of  value,  because  it  was 
less  portable  than  gold  and  for  that  reason  he 
thought  could  be  better  used  as  a  basis  for  paper 
currency.  Hamilton  and  Jefferson  urged  that 
"the  money  unit  should  stand  on  both  metals." 
Hamilton  pointed  out  that  to  authorize  gold  coins 
equal   to   so   many    dollars  and  a  silver  coin  to 


74 

represent  the  money  unit,  giving  both  equal  legal 
tender  power,  would  prevent  the  attaching  of  the 
unit  of  value  to  either  metal ;  and  insisted  on  this 
point  to  the  extent  of  recommending  the  coinage 
of  a  gold  and  a  silver  dollar  for  the  purpose  of 
having  the  money  unit  represented  in  the  coinage 
by  a  coin  of  each  metal.     He  recommended  a  gold 
dollar  containing  24!  grains  of  pure  gold  as  the 
unit  of  gold  coinage,  and  a  silver  dollar  containing 
37 1 4  grains  of  pure  silver  as  the  unit  of  silver 
coinage,  and  the  fixing  of  the  proportion  between 
gold  and  silver  at  15  to  i,  making  a  composite  unit 
as  the  measure  of  the  unit  of  value.     This  recom- 
mendation was  incorporated   without  change  in 
the  Coinage  Act  of  1792  excepting  that  no  gold 
dollar  containing  24!  grains  was  authorized,  but 
Eagles,  Half-Eagles  and  Quarter-Eagles  were  au- 
thorized to  contain  24I  grains  of  pure  gold  per 
dollar.     While  his  personal  preference  was  decid- 
edly in  favor  of  a  gold  standard,  Hamilton  did 
all  that   he  was  able  to  do  to  establish  the  coin 
circulation    of   the    United    States    on    a    double 
standard   of  coinage.     What,  under  these  condi- 
tions, was  the  standard  of  value  ?     Was  the  unit  of 
value  measured  by  24!  grains  of  pure  gold  ?     No, 
that  would  have  made  gold  the  standard  of  value 
and  would  have  destroyed  the  double  standard. 
Was  the  unit  of  value  measured  by  371 J  grains  of 
pure  silver  ?     No      That  would  have  made  silver 
the  standard  of  value  and  would  have  destroyed 
the  double  standard.    What,  then,  was  the  standard 
of  value  ?     //  was  the  uttit  of  the  Money  of  Account, 


7i 

havintr  no  representative  in  the  Coinage.  The 
legal  tender  measure  of  this  unit  was  established 
by  Section  i6,  of  the  Coinage  Act  of  April  2,  1792, 
which  provides  that  all  gold  and  silver  coins  au- 
thorized by  the  Act  "shall  be  a  lawful  tender  in 
all  payments  whatsoever,  those  of  full  weight 
according  to  the  respective  values  hereinbefore 
declared,  and  those  of  less  than  full  weight  at 
values  proportional  to  their  respective  weights." 

The  factors  that  must  be  combined  to  establish 
a  unit  of  value  using  two  or  more  metals  to  express 
the  value  of  the  unit  in  Coinage  are  their  propor- 
tional weight  and  commercial  value.  A  coin  that 
would  accurately  represent  the  unit  of  value  under 
the  double  standard  as  enacted  b}^  the  Coinage 
Act  of  1792  would  be  a  composite  coin  containing 
one-half  of  a  mass  of  metal,  combining  24!  grains 
of  pure  gold  and  37 1^  grains  of  pure  silver.  No 
such  coin  was  authorized,  therefore  the  unit  of 
the  Money  of  Account  was  not  represented  in  the 
coinage  authorized  by  the  act. 

The  measure  of  the  unit  of  value  was  24f  grains 
of  pure  gold,  zvith  a  commercial  value  equal  to  J7l\ 
grains  of  pure  silver  or,  37 if  grains  of  pure  silver, 
witli  a  coimnercial  value  equal  to  24-^  grains  of  pure 
gold.  The  law  fixing  the  proportion  between  gold 
and  silver  was  wholly  based  on  commercial  value. 

The  provision  making  gold  and  silver  coins  "a 
lawful  tender  in  all  payments  whatsoever,  those  ol 
full  weight  according  to  their  respective  values 
hereinbefore  declared,  and  those  of  less  than  full 
weight  at  values  proportioned  to  their  respective 


76 

weights,"  did  not  make  247 j^  grains  of  pure  gold 
when  coined  into  an  "  Eagle,''  a  legal  tender  for  ten 
dollars  except  when  24!  grains  of  pure  gold  had 
a  commercial  value,  equal  to  the  commercial  value 
of  371^  grains  of  pure  silver.  It  did  not  make 
371  ^  grains  of  pure  silver  coined  into  "  one  dollar," 
a  legal  tender  for  one  dollar  except  when  371^ 
grains  of  pure  silver  had  a  commercial  value  equal 
to  the  commercial  value  of  24f  grains  of  pure  gold. 
//  did  not  base  the  value  of  these  coins  upon  the  inde- 
pendent eoniniercial  value  of  the  metals  but  upon  their 
relative  value. 

Strictly  cojistrued,  as  soon  as  the  commercial 
value  of  gold  and  silver  changed  from  the  ratio  of 
15  to  I,  all  gold  and  silver  coins  struck  under  the 
Act  of  April  2.  1792,  should  have  ceased  to  be  legal 
tender  money,  except  by  weight.  This  shows  the 
fact,  until  Congress  can  hnd  the  means  of  prevent- 
mg  a  change  in  the  commercial  value  of  gold  and 
silver,  that  a  legal  tender  coinage  cannot  with 
absolute  justice  be  maintained  based  on  a  double 
standard  of  values,  and  demonstrates  the  scientific 
truth  that  there  cannot  be  two  standards  of  value 
any  more  than  there  can  be  two  lengths  for  a 
foot,  or  two  weights  for  a  pound. 

A  stable  monetary  system  cannot  be  founded  on 
a  double  standard  of  value  by  an  isolated  nation. 
The  unequal  commercial  expansion  or  contrac- 
tion of  the  commercial  value  of  the  metals  caused 
by  fluctuations  in  international  commerce,  destroys 
all  standards  of  comparison  and  disturbs  all  val- 
ues  whenever   this   is   attempted.      When   these 


77 

chancres  occur,  it  is  whoilv  immaterial  whether 
the  statement  be  made  that  gold  has  appreciated 
and  silver  remained  stationary,  or  that  gold  has 
remained  stationary  and  silver  has  depreciated  ; 
the  effect  on  the  value  of  all  property,  commodities, 
or  services  is  exactly  the  same  whichever  way  it 
is  calculated.  A  house  erected  on  metallic  pillars 
for  a  foundation,  all  those  on  one  side  being  of 
gold  and  all  on  the  other  side  of  silver,  will  stand 
firm  only  so  long  as  the  pillars  are  of  equal  length. 
If  under  the  intfuence  of  atmospheric  or  other  con- 
ditions all  of  the  gold  pillars  increase  in  length 
until  they  are  twice  as  long  as  the  silver  pillars, 
the  house,  obeying  the  natural  law  of  gravitation, 
will  topple  over  and  tall  on  the  side  of  silver,  if, 
on  the  other  hand,  the  gold  pillars  remain  station- 
ary and  the  silver  pillars  shrink  to  one-half  their 
original  length,  the  house  will  topple  over  and  fall 
on  the  side  of  silver  just  the  same.  No  one  can 
be  found  who  will  believe  Congress  can  arrest  the 
acti(jn  of  the  natural  law  of  gravitation  for  one 
moment  to  save  a  house  built  on  uneven  founda- 
tions from  falling. 

Why  is  it  then  that  any  one  should  believe  Con- 
gress can  arrest  the  action  of  the  natural  law  of  com- 
mercial values  for  one  moment,  to  save  a  monetary 
system  based  on  an  unstable  double  standard  from 
falling?  Simply  because  they  have  thought  the 
problem  of  the  standard  of  values  to  be  deeply 
mysterious,  and  have  not  sought  to  solve  it  by 
the  application  of  common  sense. 

If  the  law  cannot  maintain  the  commercial  value 


78 

of  gold  and  silver  bullion  at  the  ratio  of  i6  to 
or  at  any  other  ratio  it  may  fix  by  arbitrary  en 
actment,  it  cannot  maintain  gold  and  silver  coins, 
under  the  operation  of  free  and  unlimited  coinage 
for  both,  on  a  parity  at  a  legal  ratio  differing  from 
the  commericial  ratio. 

By  enlarging  the  sphere  of  operation  so  as  to 
create  an  international  coin  circulation  co-extensive 
with  international  commerce  the  effect  of  fluctua- 
tions that  might  cause  great  unsteadiness  if  con- 
fined within  the  limits  of  one  country,  may  be 
neutralized  by  converse  action  in  another  country 
and  thus  maintain  stability  of  coin  values.  A 
manufacturer  making  articles  for  summer  use 
will  have  a  demand  for  his  goods  during  a 
part  of  the  year  only  if  his  trade  is  confined 
to  his  own  country,  but  if  he  extends  it  to 
all  countries,  he  will  have  a  demand  during  al) 
the  year  as  summer  does  not  leave  the  world  ;  it 
only  passes  from  one  section  to  another  ;  it  can 
always  be  found  somewhere.  A  gust  of  wind 
that  will  throw  a  small,  shallow  bod}^  of  water  into 
a  great  commotion  will  cause  hardly  a  ripple  on 
the  broad  ex[)anseand  massive  depth  of  the  ocean. 


79 

III.— FALLACY  No.  3.  THAT  THE  VALUE 
OF  COINS  IS  REGULATED  BY  LAW 
REGARDLESS  OF  THE  COMMERCIAL 
VALUE  OF  THE  METAL  THEY  CON- 
TAIN. 

If  Congress  cannot  create  a  unit  unchangeable 
in  value,  if  it  cannot  arrest  the  operation  of  the 
natural  law  of  values  in  its  influence  upon  the 
value  of  gold  and  silver,  causing  them  to  expand  or 
contract  in  exact  relation  with  each  other,  neither 
can  it  regulate  the  value  of  coins  except  by 
changing  the  weight  of  their  metallic  contents. 
It  is  true  that  a  demand  for  gold  or  silver  caused 
by  the  use  of  the  metals  for  coins  tends  to  in- 
crease their  value  just  as  a  demand  for  them  caused 
by  their  use  in  the  manufacture  of  articles  of  or- 
nament or  service  tends  to  increase  their  value. 
This,  however,  is  but  one  factor  of  value,  and  it  is 
a  factor  that  is  not  wholly  within  the  control  of 
any  isolated  government.  As  long  as  all  nations 
maintain  independent  coinage,  so  long  will  it  be 
out  of  the  power  of  any  one  nation  or  any  group 
of  nations  to  enact  effective  international  coinage 
laws  or  regulations.  The  value  of  gold  and  silver 
is  controlled,  as  is  the  value  of  all  other  exchange- 
able commodities,  by  the  law  of  supply  and  de- 
mand. The  fact  that  coins  are  made  out  of  these 
metals  gives  to  them  the  additional  value  that 
such  use  bears  to  the  whole  available  supply  for 
all  purposes  and  no  more. 

The   fact   that  a  specified  weight  of   metal   is 


8o 

manufactured  into  a  coin  and  called  by  law  "  one 
dollar"  or  "  ten  dollars  "  does  not  give  the  value 
of  '•  one  dollar "  or  "  ten  dollars  "  to  the  coins. 
When  they  circulate  beyond  the  limits  of  this 
country  they  are  not  dollars,  they  are  coined  bul- 
lion, and  pass  at  their  bullion  value  only.  No  act 
of  Congress  has  ever  changed,  nor  can  ever 
change,  these  conditions.  The  legal  tender  feat- 
ure of  a  Coinage  Law  is  serviceable  only  within 
the  territory  governed  by  the  people  who  enact 
it.  If  a  coin  is  ivorth,  as  bullion,  the  value  ex- 
pressed by  its  denomination,  or  more,  it  will  pass 
at  the  denominational  value  everywhere  through- 
out the  world,  regardless  of  the  fact  that  by  the 
laws  of  none  of  the  foreign  countries  it  may  enter, 
is  it  legal  tender  at  that  or  any  other  value.  If  it 
is  not  wort//^  as  bullion,  the  value  expressed  by  its 
denomination,  it  will  not  pass  at  its  denominational 
value,  although  the  laws  of  the  country  b\'  auth- 
ority ot  which  it  is  issued,  mav  declare  that  it 
shall,  and  attach  severe  penalties  to  a  retusal  so  to 
accept  it ;  unless  it  is  received  by  those  who  can 
use  it  in  payment  of  obligations  created  in  the 
country  of  its  origin,  where  the  law  compells 
creditors  to  accept  it  as  legal  tender  money. 

In  its  own  country,  a  coin  needs  the  assistance 
of  legal  compulsion  to  cause  it  to  pass  at  its  de- 
nominational value  only  when  its  bullion  contents 
are  worth  /txv  than  that  value;  it  is  therefore  as 
plain  as  the  sun  at  noonday,  that  the  only  effect 
of  a  legal  tender  provision  in  a  coinage  law  is  to 
place  the  people  of  the  country  in  which  it  is  en- 


8l 

acted  at  a  disadvantage  in  their  dealings  with  the 
rest  of  the  world. 

The  object  of  international  coinage  laws  and 
regulations  is  to  extend  the  territorial  limits  within 
which  coins  of  the  adopted  standard  will  circulate 
freely  at  their  denominational  value,  and  thus  to 
facilitate  international  commerce  by  providing  a 
stable  basis  of  international  exchange. 

The  legal  tender  provision  in  the  Coinage  Act 
of  1792,  did  not  make  gold  and  silver  coins  "the 
Money  of  the  Constitution  "  nor  determine  their 
value.  This  was  done  by  the  commercial  value 
of  the  bullion  thev  contained,  as  expressed  in 
the  act. 


TV._FALLACY  No.  4.  THAT  THE  MAN- 
UFACTURE OF  A  COIN  ONCE  AU- 
THORIZED CANNOT  BE  DISCON- 
TINUED. 

The  Founders  of  the  Republic  had  no  such 
idea.  Robert  Morris  distinctly  advised  that  the 
coins  be  "  few  and  simple,  because  by  that  means 
they  become  familiar  to  all  ranks  and  degrees  of 
men  ;  but  when  the  coins  are  so  numerous  that  the 
knowledge  of  them  is  a  kind  of  science,  the  lower 
order  of  citizens  are  constantly  injured  by  those 
who  carry  on  the  business  of  debasing,  sweating, 
clipping,  counterfeiting  and  the  like."  Alexander 
Hamilton  recommended  "  As  it  is  easy  to  add,  it 
will  be  most  advisable  to  begin  with  a  small  num- 


82 

ber,  till  experience  shall  decide  whether  any  other 
kinds  are  necessar^^"  To  those  who  properly 
understand  the  use  of  language  this  statement 
means,  in  case  any  of  the  coins  first  authorized 
should  be  found  by  experience  to  be  unnecessary, 
they  should  be  dropped,  as  clearly  as  it  means  that 
others  should  be  added  if  experience  should 
show  such  an  addition  to  be  desirable. 

A  half-cent  coin  was  authorized  by  Act  of  April 
2,  1792.  Experience  demonstrated  that  it  was  an 
unnecessary  coin  and  its  manufacture  was  stopped 
in   1857. 

A  silver  dollar  was  authorized  by  Act  of  April  2, 
1792.  When  the  coinage  laws  were  being  revised 
in  1873,  preparatory  to  the  resumption  of  specie 
payment,  it  was  found  that  the  total  coinage  from 
1792  to  1873  had  been  : 

Of  gold $816,905,879.00 

Of  subsidiary    silver,         .         .  137,096,046,00 

Of  silver  dollars,        .         .         .  8,046,838.00 


Total   Coinage,         .         $962,048,763.00 

Of  this  total,  the  silver  dollars  are  but  8^  tenths 
of  one  per  cent.  Upon  this  evidence  this  coin  was 
dropped  as  being  unnecessary.  Had  this  wise 
action  been  allowed  to  remain  unchanged)  all  the 
disasters  the  people  of  this  country  have  suffered, 
caused  by  a  monetary  system  not  clearly  estab- 
lished on  a  stable  unit  of  value,  would  have  been 
avoided. 

Numerous  instances  of   additional   coins  being 


'  'J 


authorized,  and  of  the  manufacture  of  those 
authorized  being  discontinued,  arc  scattered 
throughout  the  coinage  laws  from  1792  to  the 
present  time  (1896).  The  exercise  of  such  power 
by  Congress  has  never  been  called  in  question  ex- 
cept in  the  case  of  the  silver  dollar.  The  claim 
that  the  silver  dollar  cannot  constitutionally  be 
dropped  from  the  list  of  authorized  coins  is  based 
on  the  fallacy  that  the  silver  dollar  is  the  constitu- 
tional unit  of  value,  and  is  therefore  peculiarly  a 
part  of  "  the  Money  of  the  Constitution,"  the 
coinage  of  which  cannot  be  interfered  with  by  Act 
of  Congress.  This  claim  is  made  in  the  face  of 
the  fact  that  for  34  years  out  of  the  first  46  years 
next  following  the  Coinage  Act  of  1792,  not  one 
silver  dollar  was  coined.  If  the  implication  that 
the  silver  dollar  is  a  part  of  "  the  Money 
of  the  Constitution  "  is  sufficiently  clear  to  admit 
of  such  a  claim  being  seriously  made,  there  are 
other  implications  decidedl}^  less  cloudy,  upon 
which  Constitutional  claims  can  be  based,  more 
far  reaching  and  effectual  in  their  logical  con- 
clusions than  any  of  the  friends  of  gold,  the  silver, 
or  the  double  standard  have  advanced. 


84 


v.— FALLACY  No.  5.  THAT  A  COIN,  THE 
COMMERCIAL  VALUE  OF  THE  BUL- 
LION CONTENTS  OF  WHICH  IS  NOT 
EQUIVALENT  TO  ITS  DENOMINA- 
TIONAL VALUE,  CAN  BE  "  THE 
MONEY  OF  THE  CONSTITUTION." 

If  there  is  any  fact  i?icorporated  in  the  Coinage 
Lmv  of  1792  more  clearly  than  another,  it  is  the 
fact  that  the  coins  to  be  authorised  under  its  pro- 
visions should  ahvays  be  zvorth  as  bullion,  as  much 
as  the  denominational  value  stamped  on  their  face. 
To  this  conclusion  every  word  of  the  discus- 
sions and  acts  of  the  Founders  of  the  Republic 
irresistibly  tend.  A  critical  examination  of  the 
discussions,  recommendations  and  acts  touching 
the  nature  of  the  money  unit ;  the  denominations 
of  coins  ;  the  weight  and  composition  of  alloy  ; 
the  charges  for  coinage  ;  the  standard  of  value  ; 
the  ratio  of  value  between  gold  and  silver  as  bull- 
ion and  in  weight  in  coins ;  the  weight  of  coins  ; 
and  the  debasement  of  coins  ; — an  examination  of 
these  points  individually  or  collectively,  can  lead 
to  no  other  conclusion.  The  introduction  of  an 
Act  authorizing  a  debased  coin,  one  the  intrinsic 
value  of  which  is  not  equal  to  the  value  stamped 
on  its  face,  would  have  been  regarded  b}^  the  men 
who  framed  and  adopted  the  Constitution  as  an 
attack  upon  the  integrity  of  the  government. 
Their  immediate  and  uncompromising  answer 
would  have  been   "A   fraudulent   coin   cannot  be 


«5 

authorized  under  a  Constitution  ordained  to  estab- 
lish justice." 

Robert  Morris  said  :  "  A  trust  so  important — = 
the  practice  of  coining,  in  order  that  weight  and 
fineness  might  be  known  at  first  view,  and  of  con- 
sequence the  faluc  be  instantly  ascertained — the 
privilege  of  declaring  this  value  b}'  particular 
marks — could  not  indeed  be  vested  anywhere  less 
tlian  exclusively  in  the  Sovereign,  because  the 
danger  of  abusing  it  was  too  great."  He  then 
adds  regretfull}',  "  And  history  informs  that 
Sovereigns  themselves  have  not  on  this  occasion 
behaved  with  that  integrity,  which  ^\  as  alike  due 
to  their  subjects  and  to  themselves,  to  the  interests 
of  the  people,  and  to  their  own  personal  glory." 
In  a  further  consideration  of  the  subject  he  points 
out  the  injustice  the  people  were  suffering  and 
were  liable  to  suffer  from  the  manufacture  abroad 
of  debased  coins  for  circulation  in  this  country. 

Thomas  Jefferson  declared,  "  if  we  determine 
that  a  dollar  shall  be  our  unit,  ivc  must  then  say 
with  precision  70/iaf  a  dollar  is ;  "  and  that  "'just 
pri)iciplcs  ivill  had  us  to  disnt^ard  legal  propor- 
tions altogether;  to  enquire  into  the  market  price 
of  gold  in  the  several  countries  with  which  we 
shall  j)rincipally  be  connected  in  commerce,  and  to 
take  the  average  of  them  ; '  also  "  that  the  mone}' 
unit  of  these  states  shall  contain  so  much  fine 
silver  as  an  assay  shall  sho\v  to  be  contained,  on  an 
average,  in  dollars  of  the  several  dates  circulating 
with  us." 

A  Grand  Committee  on  the  xMonev  Unit,  in  its 


86 

official  report  to  Congress,  called  attention  to  the 
loss  caused  the  people  of  this  country  "  by  the 
commerce  of  vile  coin  "  imported  from  England, 
using  this  strong  term  to  designate  coin  contain- 
ing less  intrinsic  value  than  required  by  their  de- 
nomination. 

x\lexander  Hamilton  discussed  the  subject  in 
minute  detail.  He  said :  "  The  intention  is  to 
show  that  the  expectation  of  commercial  ad- 
vantage ought  not  to  decide  in  favor  of  a  duty  of 
coinage,  and  that,  if  it  should  be  adopted,  it  ought 
not  to  be  in  the  form  of  a  deduction  from  the  in- 
trinsic value  of  the  coins,  than  absolutely  to  exclude 
the  idea  of  any  difference  wliatever  betweoi  tJie  value 
of  the  metals  in  coin  and  in  bullion^  "No  rule  ot 
intrinsic  value  is  violated  by  considering  the  raw 
material  as  worth  less  than  the  fabric,  in  propor- 
tion to  the  expense  of  fabrication."  "  Under  an 
impression  that  a  small  difference  between  the 
value  of  the  coin  and  the  mint  price  of  bullion, 
is  the  least  exceptional  expedient  for  restraining 
the  melting  down,  or  exportation  of  the  former, 
and  not  perceiving  that,  if  it  be  a  very  moderate 
one,  it  can  be  hurtful  in  other  respects — the  Secre- 
tary is  inclined  to  an  experiment  of  one-half  per 
cent,  on  each  of  the  metals,"  "  It  may,  perhaps  be 
thought  expedient,  according  to  general  practice, 
to  make  the  copper  coinage  an  object  of  profit  ; 
but  when  this  is  done  to  any  considerable  extent, 
it  is  hardly  possible  to  have  security  against 
counterfeits.  This  consideration,  concurring  with 
the  soundness  of  the  principle  of  preserving  the  in- 


87 

trinsic  value  of  tlw  money  of  a  country,  seems  to 
outweigh  the  consideration  of  profit." 

Having  determined  after  the  most  exhaustive 
investig^ations  what  the  weight  of  coins  should  be 
to  cause  their  face  and  intrinsic  value  to  be  equal ; 
having  determined  the  proportion  between  the 
weight  of  the  coins  of  the  two  metals  to  cause  it 
to  be  the  same  as  the  proportion  between  their 
commercial  value  ;  having  determined  the  weight 
and  composition  of  the  alloy  to  be  used  in  the 
coins  ;  having  determined  that  the  owner  of  bullion 
should  be  entitled  to  receive  of  the  same  species 
of  bullion  which  he  shall  have  delivered  to  the 
Mint  for  coinage  "  weight  for  weight,  of  pure  gold 
or  pure  silver  "  in  coin,  less  "  a  deduction  of  one- 
half  per  cent.,"  for  immediate  payment  if  required  ; 
having  made  coins  struck  in  accordance  with  the 
principles  of  sound  money  thus  applied  "  a  lawful 
tender  in  all  payments  whatsoever  ;  "  and  having 
incorporated  these  provisions  and  principles  in 
the  Coinage  Act  of  April  2,  1792,  the  Founders  of 
the  Republic  proceed  to  provide  that  any  officer 
or  person  employed  in  the  Mint,  found  guilty  of 
debasing  the  coins  "  shall  be  deemed  guilty  of 
lelony,  and  s/ia//  suffer  eieat/i." 

Is  it  possible  for  a  legislative  body  to  say  any 
more  clearl}-,  tersely  or  emphatically,  that  their 
understanding  of  the  provision  of  the  Constitution 
is  : — the  money  it  authorises  to  be  coined  and  made 
legal  tender  shall  be  of  equal  intrinsic  and  denomi- 
national value  ?  Could  they  say  to  posterity 
any  more   positively  than   they  then   said   to  the 


88 

world  :  Such,  and  such  mone}-  onl^',  is  the  Money 
of  the  Constitution  ?  The  discussions,  recom- 
mendations and  acts  of  those  who  framed  and 
adopted  the  Constitution  are  unquestionably  the 
best  interpretation  of  its  meaning'.  If  they  did  not 
know  its  meaning  bv  what  process  ol  reasoning 
can  we  be  made  to  believe  that  those  who  live  one 
hundred  years  after  them  do?  Nowhere  in  their 
discussions,  recommendations  or  acts  is  there  a 
sentence,  a  word,  a  syllable  or  a  letter  that  denotes 
any  intention  on  their  part  that  the  monetary 
system  they  established  should  ever  be  other  than 
sound  and  should  ever  have  incorporated  in  it 
any  provision  or  enactment  that  would  not  accord 
in  every  detail  with  the  principles  of  sound  money 
which  they  clearly  defined  and  applied. 

In  the  face  of  this  testimony,  what  can  be  said 
of  the  intelligence  or  honesiy  of  those  who,  in 
1896,  demand  the  coinage  of  silver  dollars  at  a 
ratio  of  16  to  i,  when  the  commerical  ratio  is  31 
to  I  ?  What  shall  be  said  for  those  who  spend 
their  energies  in  arguments  for  "sound  money' 
instead  of  correctly  instructing  the  people  that 
ov\y  gold  and  silver  eoii/s.  I  lie  iuiriusie  and  f nee 
value  of  ti'yhich  is  equal,  are  sound  money,  and  the  only 
money  thai  the  coinage  law  of  17^2  authorised  / 
This  is  the  kind  of  money  the  Founders  of  the 
Republic  provided  for,  it  is  the  only  kind  they 
authorized,  it  is  the  only  kind  of  money  that  can 
be  "  the  Money  of  the  Constitution." 


89 

VI.— THE  PRINCIPLES  OF  SOUND  MONEY 
AS  DEFINED  AND  APPLIED  BY  THE 
FOUNDERS  OF  THE  REPUBLIC. 

The  logical  deductions  from  the  loregoing  ex- 
amination of  the  subject,  showing  the  principles 
of  sound  money  as  defined  and  applied  by  the 
founders  of  the  Republic  are  : 

1.  That  the  measure  of  the  money  unit,  when 
two  metals  are  used  in  the  coinage,  cannot  be 
attached  exclusively  to  either  metal.  In  such  a 
case,  the  measure  of  the  money  unit  is  a  composite 
weight  composed  of  one-half,  in  weight,  of  the 
unit  of  coinage  of  each  metal. 

2.  That  it  is  necessary  to  define  what  shall  be 
the  measure  of  value. 

3.  That  the  weight  and  composition  of  alloy,  the 
charge  for  coinage,  the  weight  of  pure  metal  in  a 
coin,  the  ratio  of  weight  between  the  coins  of  two 
metals  when  both  are  given  equal  legal  tender 
power,  must  all  be  calculated  to  cause  the  com- 
mercial and  denominational  value  of  the  coins  to 
be  equal,  in  which  case  the  measure  of  the  unit  of 
the  money  of  account  is  one-half  of  the  combined 
weight  of  the  units  of  coinage  in  the  two  metals. 

4.  That  the  only  absolutely  just  method  of  regu- 
lating the  value  of  coins  under  a  free  bi-metallic 
coinage  system,  to  keep  them  in  accord  with  the 
commercial  value  of  their  bullion  contents,  is  to 
change  their  weight  whenever,  and  in  the  same 
degree,  as  the  commercial  value  of  bullion  changes. 

5.  That  the  greatest  crime  that  can  be  committed 


90 

is  fraudulently,  or  by  legislative  enactment,  to 
issue  coins  of  full  legal  tender  power,  the  com- 
mercial and  denominational  value  of  which  are 
not  equal.  Those  who  debase  the  coins,  says  the 
Act  of  1792,  "  shall  suffer  deaths 

6.  That  the  basis  of  "  the  Money  of  the  Con- 
stitution "  must  be  the  same  as  the  basis  of  the 
Constitution  itself.  Written  and  adopted  "  to 
establish  justice,"  its  basis  is  integrity. 


9.  FOR  THE  DISHONEST. 

The  honest-minded  are  controlled  by  principle, 
the  dishonest  by  authority.  The  most  remark- 
able fact  developed  by  the  "  sound  money  "  cam- 
paign of  1893  to  1896  is  the  assumption  by  both 
sides  to  the  controversy  that  Congress  has  a  Con- 
stitutional right  to  be  dishonest.  But  for  this 
assumption  there  could  be  no  controversy. 
Alexander  Hamilton  wrote  in  1791  : 
"  The  quantity  of  gold  and  silver  in  the  national 
coins,  corresponding  with  a  given  sum  (intrinsic 
and  face  value),  cannot  be  made  less  than  hereto- 
fore, without  disturbing  the  balance  of  intrinsic 
value,  and  making  every  acre  of  land,  as  well  as 
every  bushel  of  wheat,  of  less  actual  worth  than  in 
time  past.  If  the  United  States  were  isolated  and 
cut  off  from  all  intercourse  with  the  rest  of  man- 
kind, this  reasoning  would  not  be  equalh^  con- 
clusive.    But  it  appears  decisive,  when  considered 


91 

with  a  view  to  the  reh^tions  which  commerce  has 
created  between  us  and  other  countries. 

'•  It  is,  however,  not  improbable  that  the  effect 
meditated  would  be  defeated  by  a  rise  of  prices 
])roportioned  to  a  diminution  of  the  intrinsic  value 
of  the  coins.  This  mii^ht  be  looked  for  in  every 
enlightened  commercial  country  ;  but  perhaps  in 
none  with  greater  certainty  than  in  this,  because 
in  none  are  men  less  liable  to  be  the  dupes  of 
sounds ;  in  none  has  authority  so  little  resource 
for  substituting  Jiaines  for  things.'^ 

Unfortunately  for  "  the  general  welfare,"  Secre- 
tary Hamilton's  confidence  in  the  intelligence  of 
American  citizens,  touching  monetary  questions, 
has  been  proven  to  be  not  well  founded.  History 
furnishes  no  record  of  greater  disasters  caused  by 
"  substituting  names  for  things,"  than  the  record 
of  the  monetary  disasters  caused  by  the  people  of 
the  United  States  permitting  legislation  based  on 
ivciglit  of  metal,  instead  of  value  of  metal,  as  the 
basis  of  the  unit  of  coinage  under  a  bi-metallic  legal 
tender  coinage  system.  When  the  people  of  this 
c(nuitry  permit  themselves  to  believe  that  37 1| 
grains  of  pure  silver  coined  into  a  piece  of  money 
is  one  dollar  of  "the  Money  of  the  Constitution,'' 
regardless  of  its  commercial  value,  they  permit 
themselves  to  be  "  dupes  of  sounds."  Three  hun- 
dred and  seventy  one  and  a  quarter  grains  of  pure 
silver  coined,  was,  or  can  be  one  dollar  of  "  the 
Money  of  the  Constitution  "  only  zvhen  its  commer- 
cial value  is  eqnal  to  2^  3-Jf.  grains  of  piire  gold.  The 
discussions,    recommendations    and    acts   of    th^ 


92 

Founders  of  the  Republic  settle  this  question 
beyond  the  possibiHty  of  a  reasonable  doubt. 

The  Act  of  1834  changed  the  legal  ratio  of  sil- 
ver to  gold  from  15  to  i,  as  established  by  the 
Act  of  1792,  to  16  to  I  ;  since  then,  41 2|  grains  of 
standard  silver  have  been,  and  can  be,  one  dollar 
of  "  The  Money  of  the  Constitution  "  only  when 
the  commercial  value  of  412^  grains  of  standard 
silver  is  equal  to  25.8  grains  of  standard  gold. 

In  1782  Robert  Morris  wrote:  "  A  legal  tender 
is  as  necessary  for  the  purposes  of  jurisprudence 
as  a  general  currency  is  for  those  of  commerce. 
For  although  there  is  great  impropriety,  not  to 
sav  injustice,  m  compelling  a  man  to  receive  a 
part  of  his  debt  in  discharge  of  the  whole  ;  yet  it 
is  both  just  and  proper  that  the  law  should  pro- 
tect the  honest  debtor  who  is  willing  to  pay, 
against  the  vexatious  suits  of  the  oppressive  cred- 
itor, who  refuses  to  receive  the  full  value." 

After  determining  the  value  of  silver,  measured 
by  gold,  and  declaring  the  ratio  as  existing  at  that 
time,  thus  fixing  a  standard  for  a  bi-metallic  coin- 
age, Robert  Morris,  the  Superintendent  of  Finance 
and  one  of  the  signers  of  the  Constitution  for  the 
State  of  Pennsylvania,  makes  the  following  declar- 
ation : 

"The  demand  which  commerce  might  make  for 
any  one  of  the  precious  metals  in  preference  to 
the  other,  would  vary  this  real  (commercial) 
standard  from  time  to  time,  and  in  every  payment 
a  man  would  get  more  or  less  of  real  value  for  his 
debt,  according  as   he   was   paid   in   the   coin   of 


93 

greater  or  less  value,  in  relation  to  the  real  (com- 
mercial) standard.  If,  for  instance,  the  debt  were 
contracted  when  the  silver  was  to  gold,  as  one  to 
fifteen,  and  paid  when  as  one  to  fourteen ;  if  the 
debt  were  paid  in  silver  he  would  gain  one- 
thirtieth,  and  if  in  gold  he  would  lose  one  thirtieth." 
Having  laid  down  the  principle  that  the  object 
of  legal  tender  money  is  to  "establish  justice" 
between  creditor  and  debtor,  so  that  one  cannot 
require  more,  nor  the  other  pay  less  than  ''full 
■valued  he  points  out  the  fact  that  a  change  in  the 
commercial  value  of  one  of  the  metals  used  in  a 
bi-metallic  system  of  coinage  after  a  legal  standard 
had  been  established,  based  on  the  commercial 
standard,  would  cause  a  loss  or  gain  for  one  or 
the  other  parties  to  the  transaction,  according  to 
the  change  in  value  and  the  metal  in  which  the  pav- 
ment  was  made.  It  is  plain  that  a  coin  made  legal 
tender  when  its  intrinsic  and  face  value  are  equi- 
valent should  not  be  a  legal  tender  when  they  have 
been  separated  by  a  change  in  intrinsic  value.  A 
change  in  intrinsic  value  may  be  caused  by  abra- 
sion, or  by  sweating,  making  the  coin  "  light 
weight  '  or  by  a  depreciation  in  the  commercial 
value  of  the  metal.  The  remedy  for  "  light 
weight  "  or  over-valued  coins,  is  to  accept  "  those 
of  less  than  full  weight  at  values  proportional  to 
their  respective  weights  "  and  recoin  them.  (Act 
of  April  2,  1792,  Section  16.)  The  remedy  for 
undervalued  coins  (coins  the  face  value  of  which 
is  less  than  the  commercial  value  of  their  contents) 
is  so  to  change, the  weight  of  metal  required  for 


94 

their  manufacture  as  to  re-establish  a  parity  be- 
tween their  intrinsic  and  their  face  value.  In  no 
other  way  can  a  legal  tender  bi-metallic  coinage 
be  maintained.  If  there  is  "great  impropriety, 
not  to  say  injustice,  in  compelling  a  man  to  re- 
ceive a  part  of  his  debt  in  discharge  of  the 
whole,"  what  can  be  said  of  a  proposal  to  enact  a 
law  to  permit  a  man  to  pay  a  debt,  contracted  in 
-5t¥  grains  of  standard  gold  per  dollar,  in  412^ 
grains  of  standard  silver  per  dollar  when  that 
much  silver  will  buy  but  12^  grains  of  standard 
gold  ?  Would  not  this  be  rank  injustice  ?  Would 
not  this  be  compelling  a  man  to  "  accept  a  part  of 
his  debt  in  discharge  of  the  whole?"  Can  a  law 
founded  on  injustice  be  constitutional  under  the 
provisions  of  a  constitution  framed  and  adopted 
"  to  establish  justice  ?  "  The  answer  to  these  ques- 
tions is  plainly  indicated  by  their  terms.  They 
admit  of  no  subterfuge  or  evasion.  The  answer 
must  be  "yes"  or  "no."  Can  any  honest  man 
vote  yes  ?  The  "  full  value  "of  an  obligation  can- 
not be  discharged  by  less  than  its  full  value  given 
in  payment.  To  hold  that  it  can  is  a  mathemati- 
cal, an  economic,  a  moral,  and  a  legal  absurdity. 

In  1783,  Thomas  Jefferson,  credited  with  having 
written  the  Declaration  of  Indepence,  wrote  : 

"  TJie  proportions  bettveeri  the  vahces  of  gold  and 
silver  is  a  niercmitile  problem  altogether.  Just  princi- 
ples will  lead  us  to  disregard  legal  proportions.'' 

In  1 79 1,  Alexander  Hamilton,  who  signed  the 
Constitution  for  the  State  of  New  York,  and  was 
Washington's  Secretary  of  the  Treasury,  declared 


9^ 

in  his  report  to  Congress  on  the  establishment  of 
a  Mint :  "  The  actual  dollar  at  the  twie  of  contract- 
ing, is  the  only  one  ivJiich  can  be  supposed  to  have  been 
intended.'''  Also,  "  the  inducement  to  such  a  pref- 
erence (a  single  gold  standard)  is,  to  render  the 
unit  as  little  variable  as  possible ;  because  on  this 
depends  the  steady  value  of  all  contracts,  and,  in 
a  certain  sense,  of  all  other  property." 

Again,  Secretary  Hamilton  writes  in  his  report: 
"  To  declare  that  a  less  weight  (value)  of  gold 
or  silver  shall  pass  for  the  same  sum,  which  before 
represented  a  greater  Aveight  (value)  or  to  ordain 
that  the  same  weight  (value)  shall  pass  for  a 
greater  sum  (value),  are  things  substantially  of 
one  nature.  The  consequence  of  either  of  them, 
if  the  change  can  be  realized,  is  to  degrade  the 
money  unit  ;  obliging  creditors  to  receive  less 
than  their  just  dues,  and  depreciating  property  of 
every  kind ;  for  it  is  manifest  that  everything 
would  in  this  case,  be  represented  by  a  less 
quantity  of  gold  and  silver  than  before." 

In  1792,  a  dollar  was  declared  to  be  24^  grains 
of  pure  gold  worth  371^  grains  of  pure  silver, 
oi"'  ZJ^Va  grains  of  pure  silver  worth  24^  grains 
of  pure  gold.  If  that  law  should  now  be  re- 
enacted,  measuring  silver  by  gold,  to  establish 
the  then  legal  ratio  of  15  to  i  on  the  basis  of 
present  commercial  value  (1896),  the  silver  dollar 
would  contain  742^  grains  of  pure  silver.  This 
would  be  declaring  that  "a  greater  weight  should 
pass  for  the  same  sum  as  before,"  but  it  would 
have  no  effect  on  values  as  the  silver  bullion  in  a 


96 

dollar  would  be  of  the  same  value  as  gold.  If, 
on  the  other  hand,  the  ratio  of  15  to  i  should  be 
re-established  by  measuring  gold  by  silver,  the 
gold  dollar  would  contain  12^  grains  of  pure 
gold.  Tliis  would  depreciate  all  values  one-half, 
because  gold  is  the  existiJtg  standard  of  value.  This 
would  be  declaring  that  "  a  less  weight  (value) 
should  pass  for  the  same  sum  (value)  as  before." 
The  effect  Hamilton  portrayed  occurs  only  when 
the  unit  of  value  is  disturbed.  In  his  report 
1 791),  he  depicts  the  effects  of  such  changes  as 
follows  : 

"  Among  the  evils  attendant  on  such  an  opera- 
tion are  these  :  Creditors,  both  of  the  public  and 
of  individuals,  would  lose  a  part  of  their  property  ; 
public  and  private  credit  would  receive  a  wound  ; 
the  effective  revenues  of  the  government  would  be 
diminished.  There  is  scarcely  any  point  in  the 
economy  of  national  affairs,  of  greater  moment 
than  the  uniform  preservation  of  the  intrinsic  value 
of  the  money  unit.  On  this  the  security  and  steady 
value  of  property  essentially  depend." 

"  Intrinsic  value''  is  determined  by  the  Commercial 
value  of  the  weight,  not  weight  only.  The  value  of 
the  metal,  not  the  weight  of  the  metal  is  what 
determined  that  24^  grains  of  pure  gold  or  371 X 
grains  of  pure  silver,  should  be  one  dollar,  by  the 
provisions  of  the  Coinage  Act  of  April  2,  1792. 

Thomas  Jefferson  wrote  a  letter  to  Secretary 
Hamilton,  in  1792,  approving  his  report  "on  the 
establishment  of  a  Mint,"  in  the  course  of  which 
he  says  :  "  With  respect  to  the  dollar,  it  must  be 


97 

admitted  by  all  the  world,  tliat  there  is  great  incer- 
tainty  in  the  meaning  of  the  term,  and  therefore  all 
the  world  will  have  justified  Congress  for  their  first 
act  of  removing  the  incertainty  by  declaring  what 
they  understand  by  the  term,  but  the  incertainty 
once  removed,  exists  no  longer,  and  I  very  much 
doubt  a  right  now  to  change  the  value  and  especi- 
ally to  lessen  it.  It  would  lead  to  so  easy  a  mode 
of  paying  off  their  debts.  Besides,  the  parties  in- 
jured b}'  this  reduction  of  the  value  would  have  so 
much  matter  to  urge  in  support  of  the  first  point 
of  fixation." 

The  fixation  here  referred  to  is  "  The  Resolution 
on  Coinage  "  adopted  by  the  Continental  Con- 
gress, August  8,  1786,  three  years  before  the  Con- 
stitution of  the  United  States  went  into  effect,  and 
six  years  before  the  establishment  of  a  Mint.  This 
resolution  declared  that  "  A  dollar  shall  contain  ol 
fine  silver  S/SyVt  gi'ains."  Although  the  resolu- 
tion was  adopted  before  the  United  States  govern- 
ment was  organized,  and  no  coin  had  been  struck 
under  its  provisions,  Thomas  Jefferson  felt  it  to  be 
binding  because,  in  his  judgment,  it  may  have  in- 
fluenced values  expressed  in  the  money  of  account 
and  therefore  good  faith  required  that  it  should 
not  be  changed,  "  especially  to  lessen  its  value, 
because  it  would  lead  to  so  easy  a  mode  of  paying 
off  debts." 

When  the  Coinage  Law  of  x\pril  2,  1792,  was 
enacted,  the  contents  of  the  silver  dollar  was 
changed  from  375iVo' a^'^^^S'  ^^  fixed  by  the  Reso- 
lution of  August  8,  1786,  to  37154^  grains  of  pure 


98 

silver  because  after  further  investigation,  the  con- 
clusion was  reached  that  the  value  of  the  weight 
declared  in  1786  was  not  in  accord  with  the  then 
(1792)  commercial  value  of  the  metal. 

Through  all  this  record  one  principle  controls 
all  discussions,  recommendations  and  actions.  It 
is  the  fundamental  principle  of  justice.  This 
principle  requires  that  the  value  represented  by  a 
Coin  must  be  in  its  contents  ;  that  "  the  actual 
dollar  at  thf  time  of  contracting,  is  the  only  one 
which  can  be  supposed  to  have  been  intended," 
that  debts  can  be  neither  increased  nor  diminished 
by  acts  of  Congress.  Those  who  held  this  princi- 
ple so  clearly,  intended  to  incorporate  it  effectually 
into  the  Coinage  law  they  framed  and  adopted  for 
the  purpose  "of  establishing  justice."  This  law  is 
to-day,  a  memorial  of  the  integrity  of  those  who 
enacted  it,  for  the  protection  of  all  honest  men 
and  the  confusion  of  all  who  are  dishonest. 

Congress  has  power  to  change  the  measure  of 
value,  but  it  has  no  moral  right  to  make  its  Act 
apply  to  contracts  made  prior  to  the  date  when  the 
new  law  will  go  into  effect.  Considerations  of 
honesty,  justice,  and  the  requirements  of  the  higher 
law  forbid  such  use  of  legislative  power.  In  1750, 
in  the  "  23d  year  of  the  reign  of  his  late  Majesty, 
King  George  the  Second,"  when  a  law  was  en- 
acted fixing  a  monetary  standard,  it  was  provided 
"  that  nothing  in  this  Act ''  shall  change  the  status 
or  the  nature  of  obligations  created  prior  to  the 
date  the  Act  went  into  force. 

Are   the   honest   people   of  the  United   States 


99 

willing  to  permit  Congress  to  take  a  different 
course  now  to  satisfy  the  demands  of  the  dis- 
honest? 

The  short  of  the  whole  contention  is  :  Those 
who  now  contend  for  the  free  coinage  of  silver  at 
a  ratio  to  gold  of  i6  to  i,  believing  412^  grains  of 
standard  silver  can  honestly  be  made  a  legal  tender 
for  a  dollar  containing  25y\  grains  of  standard 
gold,  are  either  the  "  dupes  of  sounds,"  or  they 
are  dishonest.  Their  clamor  to  be  permitted  to 
scale  down  their  debts  and  destroy  their  honor 
proves  them   to  be  morally  or  mentally  defective. 

The  Constitution  is  not  the  only  bulwark  of  de- 
fense. The  value  of  $65,000,000,000  of  property  is 
at  risk.  To  depreciate  this  value  only  2%  will 
cost  its  owners  more  than  the  total  value  of  the 
product  of  all  silver  mines  in  the  United  States  for 
100  years.  What  do  the  silver  men  offer  to 
owners  of  property  in  fair  exchange  for  the  value 
the  measures  they  propose  will  destroy? 

No  man  can  advocate  a  dishonest  measure  and 
at  the  same  time  be  a  legitimate  political  descen- 
dant of  Washington  or  Jefferson,  Morris  or  Hamil- 
ton or  any  of  the  founders  of  the  Republic.  They 
were  men  of  high  ability  and  sterling  integrity. 
The  morally  or  mentally  defective  can  hold  no 
companionship  with  them.  Those  who  would 
lionor  them  must  stand  for  the  integrity  of  the 
dollar  they  authorized  and  coined.  A  do//a?',  the 
intruisic  and  face  value  of  zvhicJi  are  identical :  — such 
ivas^  is,  and  must  continue  to  be  ^'  the  Money  of  the 
Constitution^ 


lOO 

lo.     CONCLUSION. 

Having  finished  the  examination  of  details  the 
subject  may  now  be  viewed  '"  full  circled  "  in  its 
entirety.  From  what  precedes  the  following 
deductions  are  logical : 

1,  The  term  "  Mone}^,"  as  used  in  the  Consti- 
tution, means  coined  money.  It  was  not  attached 
to  paper  currency  by  those  who  wrote  and  adopted 
the  Constitution,  therefore  paper  currency  is  not 
"  the  Money  of  the  Constitution.'' 

Coined  money  is  primarily  a  commodity.  It  is, 
therefore,  a  commodity  money.  Its  value  is 
determined  by  the  commercial  value  of  the  com- 
modity contained  in  the  coin.  The  only  office  of 
the  government  in  coining  money  is  to  guarantee 
by  its  stamp  that  the  coin  contains  the  weight  and 
quality  of  metal  that  the  law  declares  it  shall 
contain. 

2.  Under  a  bi-metallic  system  of  coinage  if 
coins  of  both  metals  are  giwtneqiial  legal  tender 
power  they  should  be  oi  equal  commodity  value.  To 
make  them  of  equal  commodity  value  the  ratio  of 
difference  in  their  weight  must  be  the  same  as  the 
ratio  of  difference  in  their  commodity  or  bullion 
value.  When  this  ratio  is  declared  in  the  law,  and 
the  weight  and  denominational  value  of  each 
piece  is  also  declared  in  the  law,  in  conformity 
with  the  commercial  ratio  then  existing,  and  the 
coins  thus  authorized  are  made  full  legal  tender 
for  all  payments,  the  moment  a  change  in  the  com- 
mercial ratio  changes  the  relative  intrinsic  value 


lOI 

of  the  coins,  tJicy  should  cease  to  be  legal  tender 
money.  This  is  the  logical  result  from  the  con- 
ditions upon  which  they  were  made  legal  tender 
money, 

3.  The  adoption  of  the  decimal  system  of  money 
arithmetic  and  the  declaration  that  one  dollar  shall 
be  the  unit  of  the  money  account,  does  not  designate 
what  a  dollar  is  nor  fix  the  measure  of  its  value. 
The  dollar  of  the  money  of  account  is  an  expression 
of  value,  it  is  ?iot  a  measure  of  value.  It  may  or  it 
may  not  be  represented  in  the  coinage, 

4.  Under  a  bi-metallic  system  of  coinage,  a  coin, 
to  represent  the  unit  of  the  mcjney  of  account  must 
contain  both  metals  in  the  same  ratio  of  weight,  as 
the  ratio  of  their  commercial  value.  Such  a  coin 
has  never  been  struck  in  the  United  States,  there- 
fore the  unit  of  the  money  of  account  was  never 
represented  in  the  coinage  while  it  was  on  a  bi- 
metallic basis, 

5.  When  the  law  of  1792  declared  the  commercial 
ratio  of  value  between  gold  and  silver  to  be  15  to 
I,  and  then  provided  for  gold  coins  containing  24! 
grains  of  pure  gold  per  dollar,  and  silver  coins  con- 
taining 37i|^  grains  of  pure  silver  per  dollar,  the 
real  declaration  was  that  24!  grains  of  pure  gold 
are  of  equal  commercial  value  with  371^  grains  of 
pure  silver,  and  at  that  value  are  one  dollar  oi  the 
money  of  account;  also,  that  371^  grains  of  pure 
silver  are  of  equal  commercial  value  with  24! 
grains  of  pure  gold  and  at  that  value  are  one  dollar 
of  the  money  of  account.  The  moment  the  law 
declares  that  a  specified   weight  of   either  metal 


I02 

shall    be   the   unit    of   value    it   destroys,   the   bi 
metallic  system  and  adopts  a  single  standard. 

6.  The  law  that  declares  : 

One  dollar  2^%  grains  of  pure  gold  and  )  ^^  dollars,  i=i  dollar 
One  dollar  371^4  grains  of  pure  silver  )  ' 

and  at  that  commercial  value  to  be  legal  tender 
for  one  dollar,  as  plainly  declares  that  they  should 
not  be  legal  tender  for  one  dollar  when  they  are 
not  of  equal  commercial  value  ;  therefore  a  change 
in  the  commercial  value  of  either  metal  should 
destroy  the  legal  tender  power  based  upon  the 
ratio  of  value  that  is  destroyed  by  a  change  in 
values.  The  only  way  in  which  the  legal  tender 
power  should  be  restored,  is  to  change  the  legal 
ratio  to  conform  with  the  commercial  ratio,  and 
then  to  change  the  weight  of  the  coins  of  one  of 
the  metals  to  make  the  ratio  of  weight  in  the 
coins  conform  with  the  legal  ratio.  Such  a 
change  does  not  disturb  the  unit  of  value  because 
the  real  unit  of  value  is  a  unit  of  the  ratio  of 
value,  and  the  change  would  be  made  to  maintain 
the  ratio  of  value. 

7.  The  fundamental  fallacy  in  the  contention  as 
to  what  is  "  sound  money  "  or  what  is  "  the  Money 
of  the  Constitution,"  is  found  in  the  failure  on  the 
part  of  both  parties  to  make  a  distinction  between 
the  unit  of  the  money  of  account,  which,  under  a 
bi-metallic  system,  expresses  the  unit  of  value>  and 
the  unit  of  coinage.  Under  the  coinage  law  of 
1792,  24^  grains  of  pure  gold  was  the  unit  of  gold 
coinage,  and  371 /^  grains  of  pure  silver  was  the 
unit  of  silver  coinage,  but  neither  of  them  repre- 


103 

sented  the  unit  of  the  money  of  account,  neither  of 
them  was  in  itself  the  luiit  of  value. 

8.  Under  a  single  standard  system  of  coinage 
the  unit  of  value  and  the  unit  of  coinage  are  iden- 
tical, because  the  unit  of  the  money  of  account  is 
measured  by  the  value  of  one  metal.  Under  such 
a  system  all  values  are  measured  by  the  value  of 
the  weight  of  metal  contained  in  the  unit  coin,  and 
will  contract  or  expand  in  exact  relation  with  the 
commercial  contraction  or  expansion  of  the  value 
of  the  metal  by  which  the  unit  of  the  money  of 
account  is  measured.  It  is  this  fact  that  gives 
stability  to  a  single  standard  system  of  coinage, 
not  the  metal  selected  for  the  measure  of  the  unit 
of  value. 

9.  It  is  a  mathematical  impossibility  to  establish 
a  ratio  of  value  between  two  or  more  commodities 
without  using  the  value  of  one  as  a  measure  oi 
value  for  the  other,  therefore  under  a  bi-metallic 
system  of  coinage  while  a  unit  of  coinage  is  found 
in  both  metals  the  unit  of  value  is  found  in  neither. 
Hamilton  recognized  this  truth  when  he  stated  in 
his  report  on  the  establishment  of  a  mint,  "  If  each 
of  them  (gold  or  silver  coins)  be  as  valid  as  the 
other,  in  payments  to  any  amount,  it  is  not  obvious 
in  what  effectual  sense  either  of  them  can  be 
deemed  the  money  unit,  rather  than  the  other.  It 
seems  to  be  most  advisable  not  to  attach  the  unit 
exclusively  to  either  of  the  metals;  because  this 
cannot  be  done  effectually,  without  destroying  the 
office  and  character  of  one  of  them  as  moiiev,  and 
reducing  it  to  the  situation  of  mere  merchandise." 


I04 

lb.  The  real  "Money  of  the  Constitution"  is  a 
coin  the  intrinsic  and  face  value  of  which  are 
equal.  The  processes  by  which  this  coin  is  pro- 
duced and  the  metal  out  of  which  it  is  made  are 
immaterial.  It  is  sound  money  in  the  United 
States  ;  it  is  sound  money  any  where  in  the  world. 
It  is  sound  money  when  it  is  coined  and  it  will 
remain  sound  money  so  long  as  its  two  factors, 
intrinsic  and  face  value,  remain  equal.  For  this 
reason  coins  of  gold  can  be  struck  that  will  be 
sound  money  in  all  countries  using  gold  as  a 
measure  of  value,  and  coins  of  silver  can  be  struck 
that  will  be  sound  money  in  all  countries  using 
silver  as  a  measure  of  value,  and  both  coins  will  be 
"  the  Money  of  the  Constitution,"  if  permitted  to 
pass  at  the  commercial  value  of  the  bullion  they 
contain. 

II.  Debts  must  be  paid  in  "■  tJic  actual  dollar 
at  the  time  of  contracting^  zvJiich  is  the  only  one 
that  can  be  supposed  to  have  been  intended^  (Alex- 
ander Hamilton.) 

"  We,  the  people  of  the  United  States,  in  order  to 
establish  justice,  do  ordain  and  establish  this  Constitu- 
tion for  the  United  States  of  America T  This  is  the 
notice  that  was  given  to  the  world,  declaring  the 
intention  of  those  who  framed  and  adopted  the 
Constitution. 

Those  who  advocate  the  free  coinage  of  silver 
at  the  ratio  of  i6  to  i,  under  the  impression  that 
such  a  change  will  enable  them  to  pay  present 
debts  in  cheap  money,  are  advertising  their  dis- 
honesty or  their  ignorance. 


105 

"  Intelligence  and  honesty  are  the  only  founda- 
tions on  which  true  economic  action  can  be  based. 
In  the  final  analysis  no  man  can  be  a  gainer  by  his 
own  injustice."  (i) 

12.  The  present  (1896)  condition  of  our  mone- 
tary legislation  is  as  follows  : 

July  14,  1870,  a  law  was  enacted  authorizing  the 
issue  of  United  States  bonds,  payable  in  coin,  for 
the  purpose  of  refunding  all  national  obligations. 
At  that  time  the  legal  tender  coins  of  the  United 
States  were  gold  coins,  containing  2^,^-^  grains  of 
standard  gold  per  dollar,  act  of  1834;  and  silver 
coins,  containing  37 ingrains  oi pure  silver  per  dol- 
lar, Acts  of  1792  and  1837.  The  average  commer- 
cial value  of  the  bullion  in  the  silver  dollar  for  the 
year  1870,  was  $1,027;  for  1871  it  was  $1,025.  For 
this  reason  no  silver  dollars  were  in  circulation, 
and  the  coin  had  become  obsolete,  therefore  the 
bonds  authorized  by  the  Act  could  have  been  paid 
in  no  coin  except  gold  at  the  time  of  its  enact- 
ment. Gold  coin,  being  the  only  coined  dollars 
in  use  at  that  date  was  the  only  coin  that  could 
have  been  intended  or  paid. 

February  12,  1873,  a  law  was  enacted  revising 
the  Coinage  laws  of  the  United  States.  This  law 
made  2  5y^^  grains  of  standard  gold,  one  dollar, 
"  t/ic  Unit  of  Valued  It  did  not  change  the  weight 
of  gold  per  dollar  as  fixed  by  the  law  of  1834.  In 
this  law  of  1873,  the  silver  dollar  is  not  mentioned 

(i)    The    Law   of    Incorporated    Companies    Operating?    under 
Municipal  Franchises.     Page  31. 


io6 

as  one  of  the  coins  authorized.  So  few  silver  dol- 
lars had  been  coined  since  they  were  authorized 
by  the  law  of  1792,  and  none  of  them  having  been 
known  in  circulation  for  a  long  time,  the  coinage 
of  silver  dollar  pieces  was  not  provided  for  in 
1873,  simply  because  they  had  become  obsolete 
and  a  provision  for  their  coinage  was  unnecessary. 
The  average  commercial  value  of  the  bullion  in 
the  silver  dollar  for  the  year  1872  was,  $1,022  ;  for 
1873  it  was,  $1,004;  therefore  at  this  date  coin 
bonds  could  have  been  paid  only  in  gold. 

January  12,  1875,  a  law  to  provide  for  the  re- 
sumption of  specie  payments  was  enacted.  This 
law  provides : 

I.  For  "silver  coins  of  the  denominations  of 
ten,  twenty-five  and  fifty  cents,  of  standard  value 
[this  refers  to  the  weights  fixed  by^  the  coinage 
law  of  1873,  not  to  the  law  of  1792],  and  to  issue 
them  in  redemption  of  an  equal  number  and 
amount  of  fractional  currency  of  similar  denomi- 
nations." No  mention  of  coined  silver  dollars  is 
made  in  this  law. 

2_  y-  -Jfr  ^  '«  di^  charge  of  one-fifth  of  one  per 
centum  for  converting  standard  gold  bullion  into 
coin  is  hereby  repealed  ;  and  hereafter  no  charge 
shall  be  made  for  that  service." 

3.  "  On  and  after  the  first  day  of  January,  anno 
Domini,  eighteen  hundred  and  seventy-nine,  the 
Secretary  of  the  Treasury  shall  redeem,  in  coin, 
the  United  States  legal  tender  notes  then  out- 
standing, on  their  presentation  for  redemption  at 
the  office  of  the  Assistant  Treasurer  of  the  United 


107 

States  in  the  City  of   New   York,  in  sums  of  not 
less  than  fifty  dollars." 

4.  "  To  enable  the  Secretary  of  the  Treasury  to 
prepare  and  provide  for  the  redemption  in  this 
act  authorized,  or  required,  he  is  authorized  to 
use  any  surplus  revenues,  from  time  to  time,  in 
the  Treasury  not  otherwise  appropriated,  and  to 
issue,  sell  and  dispose  of,  at  not  less  than  par,  in 
coin,  either  of  the  descriptions  of  bonds  of  the 
United  States  described  in  the  Act  of  Congress, 
approved  July  fourteenth,  eighteen  hundred  and 
seventy,  entitled  '  An  Act  to  authorize  the  re- 
funding of  the  national  debt.'  " 

The  average  commercial  value  of  the  bullion  in 
the  silver  dollar  for  1874  was  $0,988  ;  for  1875,  it 
was  $0,964,  and  for  1876,  it  was  $0,894. 

At  the  time  the  resumption  Act  became  a 
law,  there  were  no  silver  dollars  in  the  Treasury 
and  practically  none  in  circulation.  This  circum- 
stance continued  the  necessity  of  paying  all  coin 
obligations  in  gold,  therefore,  at  the  date  of  the 
resumption  act,  United  States  notes  and  bonds 
could  have  been  paid  only  in  gold,  as  there  were 
no  other  United  States  coined  dollars  obtainable. 

January  29,  1878,  in  the  House,  and  February 
18,  1878,  in  the  Senate,  a  joint  Resolution  was 
passed  as  folloAvs : 

"  That  all  bonds  of  the  United  States  issued 
under  the  said  Acts  of  Congress  [Act  of  July  14, 
1870,  and  if  January  12,  1875],  are  payable,  princi- 
pal and  interest  at  the  option  of  the  Government 
of  the  United  States,  in  silver  dollars  of  the  coin- 


io8 

age  of  the  United  States,  containing  412^  grains 
each  of  standard  silver ;  and  that  to  restore  to  its 
coinage  such  silver  coins  as  a  legal  tender  in 
payment  of  said  bonds,  principal  and  interest,  is 
not  in  violation  of  the  public  faith  nor  in  deroga- 
tion of  the  rights  of  the  public  creditor." 

As  none  of  these  silver  dollars  were  in  existence 
on  the  date  of  this  Resolution,  they  could  not  be 
used  in  payment  of  obligations  of  any  kind,  there- 
fore, at  this  time  United  States  notes  and  bonds 
could  have  been  paid  only  in  gold. 

February  28,  1878,  a  law  was  enacted  which 
provided : 

1 .  "  There  shall  be  coined,  at  the  several  mints  of 
the  United  States,  silver  dollars  of  the  weight  of 
four  hundred  and  twelve  and  a  half  grains  troy  of 
standard  silver,  as  provided  in  the  act  of  Januar}' 
eighteenth,  eighteen  hundred  and  thirty-seven." 
The  act  of  1837  made  a  slight  change  in  the  alloy 
of  the  silver  dollar  but  continued  the  weight  of 
371%;  grains  of  pure  silver,  as  fixed  by  the  law  of 
1792. 

2.  "  Which  coins,  together  with  all  silver  dol- 
lars heretofore  coined  by  the  United  States,  of 
like  weight  and  fineness,  shall  be  a  legal  tender  at 
their  nominal  value,  for  all  debts  and  dues  public 
and  private,  except  where  otherwise  expressly 
stipulated  in  the  contract." 

3.  "  The  Secretary  of  the  Treasury  is  authorized 
and  directed  to  purchase,  from  time  to  time,  silver 
bullion,  at  the  market  price  thereof,  not  less  than 
two  million  dollars  worth  per  mpnth,  nor  more 


than  four  million  dollars  worth  per  month,  and 
cause  the  same  to  be  coined  monthly,  as  fast  as 
purchased,  into  such  dollars." 

4.  "  A  sum  sufficient  to  carry  out  the  foregoing 
provision  of  this  act  is  hereby  appropriated  out  of 
any  money  in  the  Treasury  not  otherwise  appro- 
priated. And  any  gain  or  seigniorage  arising 
from  this  coinage  shall  be  accounted  for  and  paid 
into  the  Treasury,  as  provided  under  existing 
laws  relative  to  the  subsidiary  coinage." 

The  average  commercial  value  of  the  bullion  in 
the  silver  dollar  for  1877  was,  $0.929 ;  and  for  1878 
it  was,  $0,891. 

By  the  terms  of  this  act  the  Government  re- 
tained the  profit  between  the  commercial  value  oi 
the  bullion  and  the  face  value  of  the  coin,  and  paid 
out  the  coin  in  discharge  of  its  obligations,  thus 
receiving  one  dollar  in  gold  value  for  the  silver 
dollar  and  creating  a  moral  obligation  to  receive 
it  back  at  the  gold  valuation  of  one  dollar  in  pay- 
ment for  obligations  due  to  the  Government. 

This  act  is  a  departure  from  the  principles  of 
"the  Money  of  the  Constitution,"  as  applied  in 
the  coinage  law  of  1792,  because  it  authorizes  the 
coinage  of  silver  dollars,  the  commercial  value  of 
the  bullion  contents  of  which  was  not  equal  per 
dollar  to  the  commercial  value  of  the  bullion  con- 
tents of  gold  coins,  and  gives  to  such  over-valued 
silver  coins  a  legal  tender  power  equal  with  gold 
coins. 

In  the  light  of  the  debates  in  the  House  and 
Senate,  pending  the  enactment  of  this  law,  it  is 


no 

clear  that  it  was  the  representation  and  expecta- 
tion of  those  who  voted  in  favor  of  it,  that  its 
enactment  would  cause  the  commercial  value  of 
silver  bullion  to  rise  until  the  legal  and  commercial 
ratio  would  be  brought  to  a  parity  making  the 
commercial  value  of  the  bullion  contained  in  the 
coins,  per  dollar,  of  equal  value  and  thus  bring  the 
law  in  spirit  and  in  fact  into  harmony  with  the 
sound  principles  enacted  in  the  law  of  1792.  This 
expectation  and  belief  was  not  realized  and  fur- 
nishes an  infallible  standard  by  which  to  measure 
the  value  of  the  expectations  and  beliefs  of  those 
who,  in  1896,  teach  the  people  that  the  operation 
of  a  free  silver  coinage  law  will  raise  the  com- 
mercial ratio  of  31  to  i,  to  16  to  i,  and  make  silver 
dollars  equal  in  value  with  gold  dollars. 

July  14,  1890,  a  law  was  enacted  which  provides  : 
I.  "  The  Secretary  of  the  Treasury  is  hereby 
directed  to  purchase,  from  time  to  time,  silver 
bullion  to  the  aggregate  amount  of  four  million 
five  hundred  thousand  ounces,  or  so  much  thereof 
as  may  be  offered  in  each  month,  at  the  market 
price  thereof,  not  exceeding  one  dollar  for  three 
hundred  and  seventy-one  and  twenty-five  hun- 
dredths grains  of  pure  silver,  and  to  issue  in  pay- 
ment of  such  purchase  of  silver  bullion  Treasury 
Notes  of  the  United  States  to  be  prepared  by  the 
Secretary  of  the  Treasury,  in  such  form  and  of 
such  denominations  ;  not  less  than  one  dollar  nor 
more  than  one  thousand  dollars,  as  he  may  pre- 
scribe, and  a  sum  sufficient  to  carry  into  effect  the 
provisions  of  this  act  is  hereb}'  appropriated  out 


I II 

of  any    mone}-    in    the    Treasury    not   otherwise 
appropriated." 

2.  "  That  the  Treasury  notes  issued  in  accord- 
ance with  the  provisions  of  this  act  shall  be  redeem- 
able on  demand,  in  coin,  at  the  Treasury  of  the 
United  States,  or  at  the  office  of  any  Assistant 
Treasurer  of  the  United  States,  and  when  so  re- 
deemed may  be  reissued." 

3.  "  Such  Treasury  notes  shall  be  a  legal  tender 
in  payment  of  all  debts,  public  or  private,  except 
where  otherwise  expressly  stipulated  in  the  con- 
tract." 

4.  "  Upon  demand  of  the  holder  of  any  of  the 
Treasury  notes  herein  provided  for  the  Secretary 
of  the  Treasury  shall,  under  such  regulations  as 
he  may  prescribe,  redeem  such  notes  in  gold  or 
silver  coin,  at  his  discretion,  it  being  the  estab- 
lished policy  of  the  United  States  to  maintain  the 
two  metals  on  a  parity  with  each  other  upon  the 
present  legal  ratio,  or  such  ratio  as  may  be  pro- 
vided by  law." 

5.  "So  much  of  the  act  of  February  twenty- 
eighth, eighteen  hundred  and  seventy-eight, entitled 
'  An  Act  to  Authorize  the  Coinage  of  the  Standard 
Silver  Dollar  and  to  restore  its  legal-tender  char- 
acter,' as  requires  the  monthly  purchase  and  coin- 
age of  the  same  into  silver  dollars  of  not  less  than 
two  million  dollars,  nor  more  than  four  million  dol- 
lars' worth  of  silver  bullion,  is  hereby  repealed." 

The  average  commercial  value  of  the  bullion  in 
the  silver  dollar  for  1889  was,  $0,724;  for  1890  it 
was,  $0,810;  and  for  1891  it  was,  $0,764. 


112 

November  i,  1893,  a  law  was  enacted  which  re- 
pealed the  authority  to  purchase  silver  bullion 
given  in  the  act  of  July  14,  1890.  And  then 
enacts : 

''And  it  is  hereby  further  declared  that  the  efforts 
of  the  Government  should  be  steadily  directed  to  the 
establishment  of  such  a  safe  system  of  bimetallism  as 
will  maintain  at  all  times  the  equal  pozver  of  every 
dollar  coined  or  issued  by  the  United  States,  in  the 
markets  and  in  payment  of  debts." 

The  average  commercial  value  of  the  bullion  in 
the  silver  dollar  for  1892  was,  $0,674;  for  1873  it 
was  $0,604;  for  1894  it  was,  $0,491;  for  1895  it 
was,  $0,505  ;  and  for  the  first  six  months  of  1896 
it  was,  $0,528. 

This  record  is  absolute  proof  that  the  expecta- 
tions and  beliefs  of  those  who  represent  that  the 
free  coinage  of  silver  Avill  bring  the  commercial 
ratio  of  31  to  i,  to  a  parity  with  the  legal  ratio  of 
16  to  I,  are  not  justified  by  the  teachings  of  ex- 
perience and  have  no  foundation  in  fact.  It  is 
proof  that  the  existing  disorder  of  our  monetary 
system  is  entirely  due  to  departures  from  the 
sound  principles  enacted  in  the  Coinage  law  of 
1792,  and  that  the  attempt  to  return  to  those  prin- 
ciples shadowed  forth  in  the  act  of  1890,  which 
declares  it  to  be  "  the  established  policy  of  the 
United  States  to  Maintain  the  [coins  of  the]  two 
metals  on  a  parity  with  each  other,"  must  be  fully, 
effectually,  and  permanently  consummated. 

When  it  became  apparent  that  the  operation  of 
the  limited  silver  coinage  laws  of    1878  would  not 


1 1 


restore  the  commercial  ratio  of  gold  and  silver 
bullion  to  a  parity  with  the  legal  ratio  and  that,  as 
a  result,  the  payment  of  obligations  with  legal  ten- 
der silver  dollars  having  a  less  commercial  value 
than  gold  dollars,  zvas  a  "  violation  of  public  faith  " 
and  "  in  derogation  of  the  rights  of  public  credi- 
tors," who  had  been  promised  payment  in  coin 
when  gold  coin  only  could  have  been  intended, 
Congress  undertook  to  remedy  the  defect  by  the 
parity  provision  in  the  law  of  1890.  Practically 
the  law  of  1890  reaffirms  the  single  gold  standard 
of  value,  established  by  the  act  of  1873,  as  the 
only  standard  for  legal  tender  money,  and  declares 
that  the  legal  measure  of  one  dollar  is  25^^  grains 
of  standard  gold,  and  that  all  dollars,  whether  of 
silver  or  paper,  issued  by  the  United  States,  shall 
be  maintained  on  a  parity  with  that  standard. 

The  law  of  1873  made  2^^-^  grains  of  stand- 
ard gold  the  unit  of  value.  All  obligations  con- 
tracted since  that  date  are  payable  in  the  value  of 
25t\  grains  of  standard  gold  per  dollar  as  that 
was  the  legal  measure  of  "  the  actual  dollar  at  the 
time  of  contractingP  While  a  United  States  bond 
states  on  its  face  that  it  is  payable  in  coin  it  also 
states  that  so  many  dollars  are  to  be  paid  and  no 
coin  is  a  legal  tender  under  the  parity  clause  of 
the  acts  of  1890  and  1893,  except  at  the  value 
of  25y^^  grains  of  standard  gold  per  dollar. 
If  the  executive  in  1895  and  1896  had  directed 
the  issue  of  a  bond  payable  in  coin  at  the 
rate  of  2^-f-^  grains  of  gold  per  dollar  the  obli- 
gation   would    not   have   been   changed,  the  law 


TI4 

in  all  of  its  details  would  have  been  complied 
witii,  and  millions  of  dollars  would  have  been 
saved  to  the  tax  payers  of  the  country.  It  is  an 
error  to  assume  that  an  act  of  Congress  taken  by 
itself  is  tJie  law.  The  law  is  an  act,  qualified  by 
all  other  acts  bearing  upon  it,  limited  by  the  Con- 
stitution as  construed  by  the  courts. 

The  law  says  that  the  bonds  to  be  issued  shall 
be  payable  in  legal  tender  United  States  coins. 

Legal  tender  United  States  coins  by  other  acts 
are  declared  to  be  coins  equal  in  value  to  the 
value  of  25y^^  grains  of  standard  gold  per  dol- 
lar; therefore,  by  the  terms  of  several  acts,  taken 
as  a  whole,  the  bonds  of  the  United  States,  and  all 
obligations  public  and  private,  expressed  in  dollars 
of  the  money  of  account,  created  in  the  United 
States,  are  payable  in  dollars  at  the  rate  of 
^Sttt  gi"^his  of  standard  gold,  United  States  stand- 
ard, per  dollar:  This  fact  cannot  be  evaded  ex- 
cept by  an  act  of  repudiation.  What  can  be  the 
world's  estimate  of  the  honesty  and  intelligence 
of  a  people  who  permit  this  fact  to  be  seriousl}^ 
questioned  ? 

The  world's  estimate  has  been  made  and  we  have 
our  answer  in  the  return  of  our  bonds  and  other 
securities  from  Europe,  the  export  of  our  gold, 
and  the  making  of  gold  contracts  by  our  citizens. 
In  the  light  of  these  facts,  is  it  not  clearly  the  duty 
of  the  honest  and  intelligent  people  of  this  country 
who,  when  they  assert  themselves,  are  beyond, 
question  a  ruling  majority,  to  take  the  direction  of 
affairs   into   their    own   hands   and    order    credit 


115 

destroyers  to  the  rear?  To  incapacity,  dis- 
honesty and  ignorance  in  shaping  public  policy 
and  enacting  legislation  our  monetary  disasters 
are  largely  due.  It  is  not  good  business  longer  to 
employ  the  dishonest  or  the  ignorant  to  enact 
inisovind  monetary  legislation.  A  better  bargain 
can  be   made  with   the   honest  and  capable. 

"  While  there  is  not  a  sagacious  financier  or 
economist  in  the  world  who  doubts  our  ABILITY  to 
maintain  a  gold  standard  of  values,  the  loudly  re- 
peated demand  for  '  more  money  '  and  the  legis- 
lation we  have  permitted,  in  unwise  attempts  to 
satisf)'  this  demand,  are  causing  close  observers 
everywhere  to  doubt  the  sincerity  of  our  DISPOSI- 
TION to  maintain  such  a  standard.  In  its  last 
analysis  the  question  is  one  of  disposition,  not 
ability,  if,  by  a  decisive  majority,  the  people 
clearly  declare  themselves  unalterably  determined 
to  maintain  the  gold  .standard,  which  I  believe 
they  will  do  if  the  question  is  rightly  placed  before 
them  and  proper  opportunity  is  afforded  them, 
that  fact  will  end  the  demagogues'  demand,  in  the 
name  of  the  people,  for  the  free  coinage  of  silver, 
or  the  issue  of  fiat  money,  and  with  the  disappear- 
ance of  this  demand  all  doubt  as  to  the  STABILITY 
of  our  standard  of  value  will  vanish.  When  that 
doubt  has  vanished  no  more  United  States  bonds 
will  be  placed  to  maintain  the  gold  reserve,  for 
the  double  reason,  that  gold  will  not  be  required, 
and  capital  can  gain  larger  profits  by  employing 
labor.  This  is  the  open  road  to  more  money  for 
workinofmen.     There  is  no  doubt  but  that  such  a 


ii6 

decision  can  be  obtained.  Our  self-interest,  our 
honor,  and  our  patriotism  demand  that  it  shall  be 
done.  It  is  our  duty  to  see  that  there  is  no  dis- 
crepancy between  the  requirements  of  our  legal 
enactments,  our  integrity  and  our  patriotism."  * 

The  Constitution  of  the  United  States  is  founded 
on  integrity. 

The  coinage  of  the  United  States  is  founded  on 
intrinsic  value. 

The  dollar  of  the  United  States  is  the  unit  of  the 
money  of  account,  it  is  measured  by  25^^  grains  of 
gold,  United  States  standard. 

This  is  to-day  "  the  Money  of  the  Constitution." 
Our  coinage  laws  should  stand  unchanged.  They 
provide  Sound  Money,  and  no  other  kind. 

Obligations  created  in  the  United  States  are 
payable  in  standard  gold  at  the  rate  of  25y\  grains 
per  dollar,  or  its  commercial  equivalent. 

*  A  Sound  Currency  and  Banking  System.     Pages  94  and  95. 


A    SOUND    CURRENCY   AND    BANKING 

SYSTEM— HOW  IT  MAY  BE 

SECURED. 


By  ALLEN  RIPLEY  FOOTE. 


CONTENTS. 


L — Introductory  :  A  Plea  for  a  Monetary  Commission. 
II. — A  Plea  for  a  Sound  Currency  and  Banking  System. 

Read    before   (he    Ameriean    flankers'    Assoeia/ioii    Oetoher 
IS,  1893. 
[II. — How  shall  a  Sound  Currency  and  Banking  System  be 
Established  ?    Read  before  the  Ne-w  York  Roard  of  Trade 
and  Transportation  December  13,  1893. 
IV. — Is  IT   A  Safe  Time  to   Repeal  the  National  Tax   on 

State-Bank  Currency  ? 
V. — The    United    States   Treasury   must   Cease    Doing   a 
Banking  Business. 
VI. — Record  of  the  United  States  Treasury  as  a  Bank  of 

Issue  Controlled  by  Political  Exigencies. 
VII. — Gold  Redemption  by  the  United  States  Treasury. 

Bound   in   cloth.     Price  75  cents.     All   orders   received  before 
November  i,  1896,  will  be  filled  at  the  rate  oi  fifty  cents  per  copy. 

The  Fourth  National  Bank. 
May  28,  1895. 
Allen  R.  Foote,  Esq. 
Dear  Sir  : 
Your  book,  entitled  "  A  Sound   Currency  and   Banking  Sys- 
tem," contains   a  very  satisfactory  and  comprehensive  presenta- 
tion of  the   money  question,  which  is,   at  present,   occupying  so 
much  attention  on  the  part  of  the  public. 

I  have  read  the  book  with  a  good  deal  of  interest,  and  take 
pleasure  in  commending  it  to  those  who  seek  information  with 
reference  to  a  question,  upon  the  correct  decision  of  which 
depends,  to  a  very  large  extent,  the  future  prosperity  of  our 
countrv.  Respectfully  yours, 

J.   EDWARD  SIMMONS. 

Address  orders  to 

ALLEN  R.  FOOTE, 
Bennett  Building,  ....         New  York. 


THE  LAW 

oi- 

Incorporated  Companies 

OPERATING  UNDER  MUNICIPAL  FRANCHISES 

SUCH    AS 

Gas,    Electric   Light    and    Power,    Telephone, 
Street  Railway,  and  Water  Companies,  etc. 

BY 

FOOTE   &   EVERETT, 

Assisted    by    46    Associate    Editors. 


THIS  WORK  PRESENTS 

A  Brief  Discussion  of  the  basic  economic  principles  essen- 
tial to  securing  the  best  service.  A  general  consideration  of  the 
underlying  principles  of  law  involved.  A  specific  and  exhaust- 
ive consideration,  by  states,  of  all  the  provisions  of  law  affecting 
these  industries,  whether  constitutional,  statutory,  or  judicial, 
citing  over  4000  cases  and  making  over  5000  references  to  con- 
stitutional and  statutory  provisions.  A  very  full  analytical  in- 
dex, complete  list  of  state  reports,  specimen  ordinances,  etc. 

OPINIONS  OF  OTHERS: 

We  have  carefully  examined  your  "Law  of  Incorporated  Companies  Operating 
Under  Municipal  Franchises,"  and  are  pleased  to  state  that,  in  our  opinion,  no 
work  of  greater  importance  and  more  successful  accomplishment  has  been  published 
in  many  years.  In  the  index — that  most  important  part  of  a  book,  and  yet  the 
part  most  frequently  neglected — it  is  singularly  complete. — Hoadly^  Latiterbach 
^Johnson,  Attorneys  at  Law,  New  York  City. 

.  .  .  I  cannot  forbear  congratulating  you  upon  your  verj'  happy  arrangement 
of  the  discussion  of  the  subject  in  each  state,  as  well  as  upon  the  clear  and  concise 
expression  of  the  law  as  found  by  the  compilers.  I  know  of  no  work  of  so  large 
scope,  embracing  such  a  great  number  and  variety  of  statutes  arranged  as  well  as 
this.  .  .  .  — Randal  A/organ,  General  Counsel,  The  United  Gas  Improve- 
'nent  Company,  Philadelphia. 

Three  octavo  volumes  of  over  3000  pages  bonnd  in  Law  Sheep. 

Price,  $1 5.00  net  Sent  prepaid  on  receipt  of  price 


Address  orders  to 

ALLEN    R.    FOOTE 
Bennett  Building         .        -         -         New  York. 


AA    001  023  094' '4  "' 


